Global Alliance Project

1
 Breakdown of
industrial borders
“Open Innovation”
 Acceleration of
“Closed technological evolution
Innovation”
Internal R&D  Technology convergence
 Network competition
 Diversification of
development resource
“In the past, internal R&D was a valuable strategic asset, even a
formidable barrier to entry by competitors in many markets.”
“These days, however, the leading industrial enterprises of the past

have been encouraging remarkably strong competition from many upstarts.
Surprisingly, these new comers conduct little or no basic research on their
own, but instead get new ideas to market through a different process;
Open Innovation.”
Henry Chesbrough “If we make the best use of internal and external ideas, we will win.”
2
Strategic Investment
Start-up
enterprises
Joint Venture
Technology Alliance Medium · large

enterprises
Global
enterprise Marketing Alliance
Universities
Joint R&D
R&D Outsourcing Research

institutes
Technology Commercialization
3
Korean enterprises,
Global enterprise
universities,
research institutes
GAPS  Global marketing channels
 Capital resources
Technology potential
 Development experience
Innovative ideas
 Create new markets
Talented human resources
 Diversify technology sources
 Develop new technologies
 Penetrate global market
 Increase technological value
4
Ministry of Knowledge Economy : Government support
Global enterprises & Korean enterprises, universities, institutes: Alliance building
KOTRA: Organizer
Ministry of
Knowledge
Economy
 Strategic Alliance R&D  Development of their promising
 Fund Investment or Co R&D technology and R&D capability
 Support Global Commercialization  Strategic Alliance R&D
Korean enterprises,
Global
universities, institut
Enterprise
es
Screening
committee  Organize the working group and
KOTRA management project
 Support Foreign Investment Promotion
 Search for promising business partners
5
KITECH Korea Institute of Industrial Technology Field R&D Centers Researchers
ETRI Electronics and Telecommunications Research Institute Electronics/Electrics 8,613 120,695
KIER Korea Institutes of Energy Research Machinery 3,579 45,632
KETI Korea Electronics Technology Institute Chemicals 2,720 27,212
KRICT Korea Research Institute of Chemical Technology Construction 1,095 9,371
KIT Korea Institute of Toxicology Others 2,148 17,102
* ISTK: Korea Research Council for Industrial Science and * KOITA: Korea Industrial Technology Association
Technology
KSIA Korea Semiconductor Industry Association Metropolitan: Seoul National, Korea, Yonsei Univ., etc.
KMDIA Korea Medical Device Industry Association Middle: KAIST, Kangwon, Chungnam Univ., etc.
KAIT Korea Association of Information & Telecommunication Southeast: POSTECH, Kyungpook National, Pusan Univ., etc.
KOSA Korea Software Industry Association Southwest: GIST, Chonbuk National, Jeju Univ., etc.
KDIA Korea Display Industry Association
KPMA Korea Pharmaceutical Manufacturers Association * NRF: National Research Foundation of Korea
6
Presented by Mr. Anja Koenig, M. Director
* Originally named as GATE(Get Armed To Explore global market) Project

7
March 19, 2008
Launching conference
June-July, 2008
Preliminary screening based on
technological capability
July, 2008
In-depth evaluation on business plan Signing Ceremony
October 9th, 2008
Ramada Plaza Hotel, Cheongju
July-September, 2008
Due diligence
October 2008
Final decision: 3 start-ups selected
- Each company receives seed funding and
management consulting from Novartis Venture Fund
8
Presented by Mr. Paul Jacobs, CEO
9
April 8, 2009
June-August, 2009
* 67 companies and universities applied
September-October, 2009
Launching Conference
In-depth evaluation on business plan April 8th, 2009
KOTRA, seoul
* 21 companies reviewed
November 2009 (planned) Due diligence and negotiation
December 2009 (planned) Final decision: 1 start-up will be selected
10
Presented by Mr. Marc Cluzel, Senior VP
11
June 16, 2009
August-October, 2009
* 61 companies and universities applied
October-December, 2009 Launching Conference

June 16th, 2009
In-depth evaluation & Due Diligence Plaza Hotel, seoul
* 20 companies reviewed after CDA
January-June 2010 (planned)

Final decision for Joint R&D or Investment
12
 Global enterprises introduce policies associated with
Launching investment, technology, and alliance cooperation
Conference  Invite Korean enterprises and organizations that wish to
attract investment, perform joint R&D activities, and build up Global Enterprise
technology/marketing alliances
 Korean enterprises and organizations wanting to participate in

Application GAPS
(1 Month)  Three(3) tracks are applicable:
① Investment ② Joint R&D ③ Technology/marketing alliances
[ Criteria ]
Preliminary  Investment: management, technology, marketability, IPR, etc.
Screening  R&D: track record, innovativeness, teamwork, etc.
 Alliance: deal structure (Screening Committee)
(2 Month)
* Strategic fit to the enterprise would be taken into account for all tracks
In-depth Evaluation
 In-depth evaluation : investigation and interview Global Enterprise
Due Diligence  Due diligence
(2 Month)
Final Decision  Investing in selected Korean enterprises, performing joint R&D Global Enterprise
(1 Month) activities, and/or building technology/marketing alliances
13
for Preliminary Screening, In-depth Evaluation, and Due Diligence
Screening Criteria
Screening factors
 Investment: technology, business Technology Market
feasibility, financial status, management  Technology superiority  Market forecast
skill, etc.  Core tech. existence  Expected M/S
 R&D: R&D experiences and  Competitiveness  Major customers
capability, innovativeness, etc.  Intellectual properties  Competitors
 Development progress  Marketing strategy
 Technology/Marketing alliance:
collaboration structure, etc.
 Common: strategic suitability with
global enterprises R&D Capability
Investigator  Human resources
 R&D expenses
 KOTRA screening committee with
 R&D performance
Korean industrial experts
 Commercialization plan
 Internal experts for R&D/business
development in Global enterprises
14
 Strategic database sharing
- List of promising Korean company,
research institute, and university
 Public Relations(PR) & Publicity

- Enhance Korea friendly image
- Propose win-win alliance
 Just one presentation at a place

- Gathering all companies, institutes, and
universities at a launching conference  Customized procedure
- According to strategies of global enterprises.
 Preliminary screening by local experts
- Professionals in private and public sector  Covering the entire investment process
- From launching conference to final
 Sponsored by MKE execution
15
16
17
Foreign Investment Forum 2009
Key H. Kim, Ph.D.

Distinguished Fellow
Adv. Inst. of Convergence Tech.
Seoul National Univ.
1
19/27 Advanced Institutes of Convergence Technology

1. Introduction
Very difficult to manage in rapidly changing environment

Www Internet Era and Short Product Life-cycle

2. What is Open Innovation
Innovation in 21st century

The best of times & the worst of times
20th century R&D

Mainly Closed Innovation : Successful innovation requires Control & Inside
- Hire the best & brightest

- Discover, develop, manufacture, marketing all by ourselves
- First comer will win
- R&D Investment will ensure the market lead
- Control IP, so that our competitors don’t profit from our ideas

Closed innovation’s virtuous circle
Fundamental Technology
Breakthroughs
Increased Investment New Products &

in R&D Features
Increased Sales & Profits

via Existing Business Model

The closed paradigm for managing industrial R&D
Research Development
Research
projects
The
Market

The virtuous circle broken
The break Fundamental
technology
breakthroughs
Increased investment New products

in R&D & features
IPO or Acquisition Key engineers

Increased exit to form
sales & profits new company
RIP Venture capital helps

(rest in peace) team focus on new market,
new business model

The open innovation paradigm for managing industrial R&D
Research Development
New market
Research Current
projects
Market

Contrasting principles of closed & open innovation
Smart people in exclusively Smart people inside & outside
We do all R&D, commercialization We can be flexible to increase value
First to the market by original R&D No need for original
Better business model is

Market first will win
better than market first
We do all and win Best use of internal & external, win
IP to prevent others IP for exchange knowledge

Difference in Closed vs. Open Innovation
Example of industry: Nuclear

Example of industry: PCs, Movies
reactors, Mainframe computers
Largely internal ideas Many external ideas
Low labor mobility High labor mobility
Little Venture Capital Active Venture Capital
Few, weak start-ups Numerous start-ups
Universities unimportant Universities important

Playing Chess & Poker
Plan ahead After new info, act accordingly
Resources revealed Gradually resources revealed
As time go on, know opponents

Know opponent’s resources clearly
resources
No more new info. during the game Regularly new info in
Predictable Technology
Predictable Market

Conflicting objective of Research & Development
Cost center Profit Center
Discovery : Why? Execution : How?
Hard to Predict Hit targets
Hard to schedule Hit schedules
Create possibilities Minimize risk
Identify problems & Solve problems within

how to think about them constraints

Erosion factors of closed innovation paradigm
in late 20th century
Increasing availability & mobility of skilled workers
Venture capital market
External options for ideas sitting on the shelf
Increasing capability of external suppliers
Shortening product life-cycle
Increasing R&D cost rapidly

Business Model as a Cognitive Map across Domains
Business Model
Target market
Technical Economic
Value Proposition
Input Outputs
Value chain
 Feasibility  Value
How paid
 Performance  Price
 Other measures Costs / margins  Profit
Value networks  Other measures
Competitive Strategy Measured in

Measured in
Technical Domain Social Domain

Intensive Case studies by H. Chesbrough
Xerox PARC / Texas Instrument

IBM : Remarkable Transformation
Open Innovation @ Intel
Lucent’s Bell lab & New Venture Group(NVG)
Business Models & Managing IP
- P & G’s C & D
- Millenium Pharma case

P & G’s C & D
Connect and Develop
Internal R&D 8,000 H.R.

Outside R&D 1,500,000 H.R.
RFP(Request for Proposal) to outside network

Outstanding performance by C&D
R&D Productivity increased more than 60%

Net Profit : $2.9 billion in 2001 to $8.7 billion in 2007
Net New Products : 35% from outside
New Development plans : 45% from outside ideas

Millenium’s Success Story
Millenium Pharma started in 1993 as CRO* business

* Contract Research Operation
Shrewd IP strategy to build-up own Intellectual Asset
Many CR contracts & collaboration thru the years

In 2008, sold the company to Takeda by $8.8billion
A New Business Model & Managing Intellectual Property

3. Why Open Innovation
Korea’s knowledge landscape :

Shallow basic research foundation
From Catch-up to Leader in Technology
Global Competition / Market
Market / Customer Oriented R&D
More cost effective & time saving for

R&D and commercialization

Effect of Open Innovation
$1.5-2billion/yr in the US
$3bln in 1980 →
$100bln in 2007 worldwide

Revenue / Cost of closed & open innovation
Revenue
Sale of tech.& IP
Spin-off Creation of
Shrinking new revenue
life-cycle Licensing
Company
Revenue Company Company
Revenue Revenue
Internal Internal Internal

R&D cost R&D cost R&D cost
Increase innovation cost
Cost
Past closed Present closed Open

innovation innovation innovation

4. How to do it
R&D Management Change
Researchers paradise
R&D productivity by system management
R&D and Business co-work by CTO’S strategic technology management
New growth engine by open innovation

- GE’s Imagination breakthrough project
- Nokia, Microsoft, HP, IBM’s R&D based new business creation strategy

4. How to do it
Obstacles on Open Innovation
NIH(Not Invented Here) Syndrome
Distrust on outside technology
Psychological Barrier
During securing outside technology, why not develop new technology inside?
By adopting outside technology, cut down internal R&D & budget?
With open technology base, potential competitor arrival and erosion of profit?
NSH(Not Sold Here) Virus
NSH Virus by Business Division

4. How to do it
Diverse idea pool generation
 Global networking
 Active internal R&D
 Global outsourcing
Right business model for New Technology
Open mind in the organization
Result oriented flexible culture

5. Actions to Open Innovation
Set-up
Experiment with
“Open Innovation”
a small project
team inside
Experience success
first and diffuse to
organization
Learning
Utilize open
knowledge on
network first
execution process
Nine Sigma
Your Encore
Innocentive, etc
Build-up
IP, Contract &
Legal experts

6. Concluding Remarks
Korean economy at the cross-road
Rapid recovery from economic crisis
Low carbon green growth for sustainable, global economy
Heavy manufacturing to knowledge based industry
Technology fusion & convergence technology
Need for more effective R&D strategy:

New innovation paradigm

6. Concluding Remarks
Open Innovation for Industries:

Big companies & SMEs as well
Open Innovation for Academia, GRIs & Government, too
Truly Global Open Innovation with COE concept
Global Alliance Project Series(GAPS)
Global Hub to foster Open Innovation

Open Innovation for Better World !
K : Knowledge Economy
O : Open Mindedness
R : Research & Development
E : Entrepreneurship
A : Actions immediately
Thank you for your attention
Contact: keykim@snu.ac.kr

Global Alliance of Qualcomm
November 5, 2009
Dr. Cha, Young Ku
SVP and President of Qualcomm Korea Ltd.
Safe Harbor
Before we proceed with our presentation, we would like to point out that the following discussion
will contain forward-looking statements from industry consultants, Qualcomm, and others regarding
industry trends, anticipated future results and product availability, potential market size, market shares,
and other factors which inherently involve risks and uncertainties, including the rate of development,
deployment and commercial acceptance of CDMA- and OFDMA-based networks and technology and
fluctuations in the demand for CDMA- and OFDMA-based products, services or applications.
 These and other risks and uncertainties relating to Qualcomm’s business are outlined in detail in our
most recent 10-Q and 10-K filings with the Securities and Exchange Commission.
 Please consult those documents for a more complete understanding of these risks and uncertainties.
This presentation includes a discussion of "non-GAAP financial measures" as that term is defined
in Regulation G. The most directly comparable GAAP financial measures and information reconciling
these non-GAAP financial measures to the company's financial results prepared in accordance with
GAAP have been included at the end of this presentation.
Disclaimer
Nothing in these materials is an offer to sell any of the components or devices referenced herein. Certain
components for use in the U.S. are available only through licensed suppliers. Some components are not
available for use in the U.S.
46 3/3/09
Founded in 1985
Fortune 500 Company
Approx. 11,000 U.S. and 50,800 I

nternational patents and patent a
pplications of CDMA and related
technologies including WCDMA
and OFDMA
Member of the S&P

100 & 500 Indexes
47
Financial Highlights—Fiscal 2008
Record Revenu Operating Inco EPS Cash Flow

es me $1.90 $3.56 Billion
GAAP Operating
$11.1 Billion $3.73 Billion
Cash Flow
UP YOY 26% UP YOY 29% DOWN YOY 3% DOWN YOY 7%
Note: Pro forma results exclude the QSI segment, certain estimated share-based compensation, certain tax items related to prior years and acquired in-process R&D expense.
Free cash flow defined as net cash provided by operating activities less capital expenditures.
48
Qualcomm Business Model:
Technology and Value Chain Enabler
49
Investment in a Complete
Technology Roadmap
Qualcomm Yearly R&D Expenditures (Billions)
3
20.5%
of Revenu
e
20.6%
of Revenu
2 20.4% e
of Revenu
e
17.8%
of Revenu
e
1
0
2005 2006 2007 2008
Source: Qualcomm
50
Qualcomm’s Unique Patent Position
Patent position is a strong asset value
Cumulative Foreign
Granted and Pending Patents
Cumulative US Patents
(Excludes non-US pending and granted patent
s)
TOTAL APPROX.
51K
TOTAL APPROX.
TOTAL APPROX.
10K 11K
GRANTED 2.4K GRANTED 3.1K
June 2008 June 2009 GRANTED 17K
March 2009
51
Qualcomm in Korea
 1991 - Joint Development Agreement with ETRI
 ETRI invested US$17 million and received over US$200 million in return.
 1993 - License agreements with Samsung, LGE, Hyundai, and Maxon
(ETRI Designated Manufacturers - “DM”s)
 1994 – Invested US $18 million in Shinsaegi Telecom (through 1999)
 1996 - First commercialization of CDMA System in Korea

 Korean government, Korean manufacturers, and Qualcomm jointly commercialized the CDMA
technology
 1999 – Invested US $200 million in KTF
 2000 – Invested 50% of 70 billion Won in Hansol I Venture Fund
 2000 – SKT launched CDMA2000 1X network
 2001 – Invested US $5 million in Wireless Internet Fund with SKT
 2002 – KTF and SKT launched CDMA20001X EV-DO networks
 2006 - KTF and SKT launched HSDPA networks
52
Qualcomm in Korea
Success of Mobile Industry in Korea
• Korean mobile industry was very small fifteen years ago but has
grown explosively since the introduction of CDMA
- Mobile subscribers have grown 23.4 times, service revenue 21 times, and
mobile equipment (handset + system) 29.4 times (till 2007)
- Export of mobile products have grown….
• Mobile industry has been one of the key contributor for the IT
sector, the growth engine for Korean economy
- Exports of mobile products is 8.2% of total exports ($ 30.8 billion) in 2008
- Market shares of Samsung and LGE is 16.2% and 8.3% in 2008
• Qualcomm’s strong technical support for handset manufacture

enabled Samsung, LG and other Korean handset manufacturers to
penetrate into global market by leveraging their success in
Korean market with the CDMA system and handsets
53
Qualcomm in Korea
• This success in mobile telecommunication business is

unparalleled by any other OECD countries
• Qualcomm’s success has been dependent upon the growth of

the market and success of its customers such as
Samsung, LG, and Pantech
• Qualcomm will closely work with Korean government and

industries for the continued success of the Korean mobile
telecommunication industries
54
New Era of Qualcomm Korea
CDMA home town & 25th anniversary of Qualcomm
Qualcomm Korea Ltd.

 R&D Center/Venture Investment
 Biz Dev./Technical Marketing
Above waterline
Below waterline
Qualcomm Inc.
1. Huge R&D investment – more than 20% or reve
nue
2. Unique Patent Position
3. Business Model
4. Strategic Alliance with Korean manufacturers –
Support SSE, LGE to make them succeed in th
e global market
55
Qualcomm and Korea
“Qualcomm and Korea are ideal partners for mutual growth”
 Qualcomm is Korea’s best strategic partner in global mobile industry
 Qualcomm has been continuously contributing to Korean economy and society
• Qualcomm is a high-tech leading company in mobile industry
• Qualcomm and Korea has been leading global IT industry together. Qualcomm and Korea are
the best partners to fight against competitors in the global market.
• Qualcomm invests in Korea to contribute to the Korean economy and society by supporting
the development of the technologies and the underprivileged and engineering students in
Korea
56
Thank You
57
2009.11
Samsung Advanced Institute of

Technology
Ship-building &
Art Museum Medical Center Defense Solution Heavy Industry
Fashion & Material
Electronics
Insurance TV, Mobile, Chip, LCD
Amusement Park
Chemical (Petro, Fine)
Financing & Security

Sports Team Securities
IT Service & Construction &
Hotel & Resort Networks Plant Engineering
- 59 / 10 - Copyright Samsung
SEC All Rights
Boundless Search for New Business = Continuous Growth
To find post-semiconductor
and post-mobile business
Consumer Electronics / Component
Devices / Chemical
Memory/Telecom.
?
N/W/Construction/Heavy Industry/
Cell phone/LCD/Flash/Corning 4%
Precision GlassRobot /Secondary
WiBro/Service 34%
Batteries./Digital Cam./
High value added Ships
X 17
25%
4%
X2
25%
X 14
37%
9% X 1.2
71%
X4
X 34 91%
1976 1986 1996 2006 2016
- 60 / 30 - CopyrightSamsung
SEC All Rights
Samsung Electronics & Corning
Glass supply for LCD Panel
Production cost advantage
Samsung Electronics & SONY
7th Gen. Amorphous LCD
Samsung SDI & Bosch
Production of environment friendly
Li-ion Automotive batteries
Samsung Electronics & Thales

Specializes in defense & civil solution
(RFID, radar, security, weapon system…)
Samsung Electronics & Toray

Specializes in LDI packaging with
Samsung’s ASS’Y & Toray’s Base Film Tech.
SEC All Rights
Diversify Engines of Innovation through
Global Research Community and Industry
Collect Creative Ideas worldwide Technology and Management Advisory

Initiate Technology Breakthrough
Fortify IP
Minimize Production Cost
Secure World Standardization
Speed up Research
Create Technology Convergence
SEC All Rights
Design / Market / University / High-tech. Technology
Innovation Early Adopters Research Industry Experts /
Experts Institute Futurists
Marketing Market Outsourcing R&D Advisory on

Know-how Feedback Basic Collaboration - Mgt. Level
(MOT)
Process Consumer Research Building - Research
Innovation Trend Brainstorming Alliance Level
Human
… … … MOT
Network
Exchange
Idea
IP
Generation
…
- 63 / 10 - … All Rights
CopyrightSamsung
SEC
Design /
Innovation
Product Ideation Experts
(Marketing, Designing…)
Market /
Early Adopters
Technology Outsourcing
High-tech.
(Alliance, Sensing, Network…) Industry
University /
Research
Strategic R&D Partnership Institute
Technology
Experts /
Futurists
SEC All Rights
Design /
Innovation
Product Ideation Experts
(Marketing, Designing…)
Market /
Early Adopters
Technology Outsourcing
High-tech.
(Alliance, Sensing, Network…) Industry
University /
Research
Strategic R&D Partnership Institute
Technology
Experts /
Futurists
SEC All Rights
Idea Hunting Filtering Research Development
- 66 / 10 -
CopyrightSamsung
SEC All Rights
Idea Hunting Filtering Research Development
Joint
• Future Market Trend
Labs Outside Partners
Samsung
• Technology Sensing Business Units
• Strategic Research Collaboration
Contribution
Business
• University Research • Industry Partnership
• Venture
Business
• Technology Experts units
• Global Experts (Joint
Development
)
SEC All Rights
Yokohama , Japan
Moscow, Russia
London , England
San Jose, US
Bangalore, India Beijing, China
Dallas, US
Yakum, Israel Suzhou, China
Nanjing, China
Warsaw, Poland Noida, India
SEC All Rights

Global Alliance Project

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1

“These days, however, the leading industrial enterprises of the past

Technology Alliance Medium · large

R&D Outsourcing Research

* Originally named as GATE(Get Armed To Explore global market) Project

November 2009 (planned) Due diligence and negotiation

December 2009 (planned) Final decision: 1 start-up will be selected

October-December, 2009 Launching Conference

* 20 companies reviewed after CDA

January-June 2010 (planned)

 Korean enterprises and organizations wanting to participate in

 Public Relations(PR) & Publicity

 Just one presentation at a place

Key H. Kim, Ph.D.

19/27 Advanced Institutes of Convergence Technology

Very difficult to manage in rapidly changing environment

20/27 Advanced Institutes of Convergence Technology

Innovation in 21st century

20th century R&D

- Hire the best & brightest

21/27 Advanced Institutes of Convergence Technology

Increased Investment New Products &

Increased Sales & Profits

22/27 Advanced Institutes of Convergence Technology

23/27 Advanced Institutes of Convergence Technology

Increased investment New products

IPO or Acquisition Key engineers

RIP Venture capital helps

24/27 Advanced Institutes of Convergence Technology

25/27 Advanced Institutes of Convergence Technology

Smart people in exclusively Smart people inside & outside

We do all R&D, commercialization We can be flexible to increase value

First to the market by original R&D No need for original

Better business model is

We do all and win Best use of internal & external, win

IP to prevent others IP for exchange knowledge

26/27 Advanced Institutes of Convergence Technology

Example of industry: Nuclear

Largely internal ideas Many external ideas

Low labor mobility High labor mobility

Little Venture Capital Active Venture Capital

Few, weak start-ups Numerous start-ups

Universities unimportant Universities important

27/27 Advanced Institutes of Convergence Technology

Plan ahead After new info, act accordingly

Resources revealed Gradually resources revealed

As time go on, know opponents

No more new info. during the game Regularly new info in

28/27 Advanced Institutes of Convergence Technology

Cost center Profit Center

Discovery : Why? Execution : How?

Hard to Predict Hit targets

Hard to schedule Hit schedules

Create possibilities Minimize risk

Identify problems & Solve problems within

29/27 Advanced Institutes of Convergence Technology

Increasing availability & mobility of skilled workers

Venture capital market

External options for ideas sitting on the shelf

Increasing capability of external suppliers

Shortening product life-cycle

Increasing R&D cost rapidly

30/27 Advanced Institutes of Convergence Technology

Competitive Strategy Measured in