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HITACHI MOVES MEDIA MANUFACTURING TO CHINA

Hitachi Global Storage Technologies, one of the world's leading hard disk drive suppliers, announced a three-year initiative to relocate the majority of its media manufacturing operations from San Jose, Calif., and Odawara, Japan to its facility in Shenzhen, China. The media is the key component of the hard drive upon which electronic data is written in the data-recording process.

Hitachi acquired IBM's hard disk drive business in December and launched Hitachi GST on Jan. 1. The initiative is an essential element of Hitachi's overall plan to integrate its operations.

Hitachi GST expects to begin media manufacturing at its Shenzhen facility by the fourth quarter of 2004 and will be in full production by the first half of 2006. San Jose and Odawara will continue to be the primary media facilities through the end of 2005. At that time, the company will assess the current business conditions to determine if redeployment of personnel and other resource actions may be necessary in San Jose and Odawara.

The company plans to keep critically skilled media development and manufacturing pilot lines in San Jose and Odawara for innovative drive technology such as perpendicular recording. Hitachi GST's media organizations have approximately 800 employees worldwide.

"This initiative will allow us to be more responsive to our customers by improving operational efficiencies and our time-to-market capabilities," said Dr. Jun Naruse, CEO of Hitachi GST. "Open and honest communication with our employees this far in advance is critical to ensuring a smooth media operations ramp up while allowing us time to accommodate employee needs."

The move toward cost-competitive manufacturing is a hard disk drive industry trend, driven by the lowering of PC and laptop prices and the increasing use of hard drives in consumer electronic devices and other non-traditional applications. According to TrendFocus, an industry research firm based in Palo Alto, Calif., consumer electronics applications could account for some 30 percent of hard disk drive unit shipments by 2006, up from five percent in 2002.

About Hitachi Global Storage Technologies

Hitachi Global Storage Technologies was founded in 2003 as a result of the strategic combination of Hitachi's and IBM's storage technology businesses. The company's vision is to enable users to fully engage in the digital lifestyle by providing access to large amounts of storage capacity in formats suitable for the office, on the road and in the home.

The company offers customers worldwide a comprehensive range of storage products for desktop computers, high-performance servers and mobile devices. For more information on Hitachi Global Storage Technologies, please visit the company's Web site at www.hgst.com.

About Hitachi Ltd

Hitachi Ltd, headquartered in Tokyo, is a leading global electronics company, with approximately 340,000 employees worldwide. Fiscal 2002 (ended March 31, 2003) consolidated sales totaled 8,191.7 billion yen ($68.3 billion). The company offers a wide range of systems, products and services in market sectors, including information systems, electronic devices, power and industrial systems, consumer products, materials and financial services. For more information on Hitachi, please visit the company's Web site at global.hitachi.com.