Features - Storage Innovations:

HITACHI INCREASES MICRODRIVE PRODUCTION

Driven by exponential increase in demand for its Microdrive storage media, Hitachi Global Storage Technologies is implementing an unprecedented growth strategy for the one-inch hard drive. In 2004, Hitachi GST plans a substantial manufacturing expansion for the 4GB Microdrive product at its Thailand facility. This development is being spurred by the proliferation of hard disk-based storage in consumer electronic devices, especially portable digital music players.

Hitachi GST recently received approval from the Thailand Board of Investment (BOI) to expand its local hard drive production from 30 million to 60 million units annually, including production of the one-inch Microdrive, 2.5-inch Travelstar and 3.5-inch Deskstar product lines. To double its annual production, Hitachi GST will invest $200 million (8 billion Baht) to upgrade and expand the Thailand facility over several years. With this move, Thailand will help to positively impact hard drive availability worldwide, especially Hitachi GST's highly popular Microdrive product.

In 2004, Hitachi GST plans to significantly increase production volume of the 4GB Microdrive media to several million units per quarter. The company expects this growth trajectory to continue into the foreseeable future, in line with consumers' growing appetite for storing large amounts of entertainment content in portable formats. The recent Thailand BOI action will more easily facilitate any additional Microdrive manufacturing increases Hitachi GST needs to make beyond current production plans.

"The growth of consumer electronic devices that require high-capacity, miniaturized storage is accelerating the pace of Microdrive adoption beyond our expectations," said Bill Healy, senior vice president of Consumer & Commercial HDDs for Hitachi Global Storage Technologies. "After being the hard drive miniaturization leader for the past five years, we are validated in seeing the tremendous opportunity that now exists for the one-inch and other small form factor drives. Hitachi GST is preparing take full advantage of this opportunity with our Thailand plans."

Demand for the Hitachi Microdrive digital media has risen across all segments -- digital cameras, PDAs, GPS devices, etc. -- but is strongest among hard disk-based digital music players.

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. By the end of 2003, Hitachi GST became the industry's second largest hard disk drive manufacturer with $4.2 billion in revenue.

The company's goal 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.hitachigst.com.

About Hitachi, Ltd.

Hitachi Ltd, headquartered in Tokyo, is a global electronics company, with approximately 326,000 employees worldwide. Fiscal 2003 (ended March 31) consolidated sales totaled 8,632.4 billion yen ($81.4 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 www.hitachi.com.