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News Release

February 9, 1998

Development Co-operation Between Hitachi and Nortel Strengthens Support for Industry Standard MiniDIL Portfolio

Hitachi (NYSE:HIT) and Nortel (Northern Telecom Limited) today announced their increased commitment towards industry support for the 8-pin MiniDIL as a standard laser component for access and metropolitan networks. The two companies have agreed to develop laser diode transmitter modules and photodiode receiver modules in the standard 8-pin MiniDIL dual-in-line format as a next generation optical component and will set up a mutual production and supply system to provide customers with a stable chain of supply of these products, as well as to expand sales.

To match the rapid telecommunications evolution occurring as a result of increasing demand for information, more and more optical communications cables are being laid. Looking to the future, the implementation of optical fiber-based access and metropolitan networks is expected to be stepped up in order to cope with the rapid increase in the number of people using the Internet, two-way interactive CATV and video-on-demand, including subscribers to Fiber to the home (FTTH) and the like. This type of local area optical fiber installation is generating a demand for standardized optical devices which have excellent mounting/packaging properties, are compact and low cost, and are easily adapted to high- volume production.

To meet these market needs, the two companies will develop ceramic MiniDIL technology based on a passive alignment system employing Nortel's Si-V groove technology, and low cost, high performance ceramic MiniDIL modules by application automation of Hitachi's volume fabrication technology. The two companies also plan to jointly develop lower-cost plastic MiniDIL products based on plastic MiniDIL technology now being developed by Hitachi.

So far this field has been using 14-pin DIL modules and coaxial modules. The MiniDIL is the third-generation product developed as a low-cost, high performance, high reliability solution. The flat module measures 13.2mm by 76mm and in this field is the world's smallest laser photodiode module. It is pin-compatible with the 14-pin DIL so can be used as a drop-in replacement or upgrade without any change to circuit boards. The flat package configuration means that, unlike a coaxial module, no lead bending is required, which makes it easier to assemble on customer boards and helps to trim production costs. The product complies with the Bellcore 983 integrity standard covering subscriber network laser diode modules.

Speaking on the agreement, Dr Tsugio Makimoto, Senior Executive Managing Director of Hitachi said, "Our diversified technologies developed for semiconductor design and leading mass-production technology will ideally be applied to the new era of optical products. We are very pleased to be working closely with Nortel to offer true primary and second source capability of compatible products to the market for security of supply chain of an industry standard range of products."

Mr Peter Allen, Vice President, Nortel Advanced Components, stated: " This alliance will be a powerful force in the industry and will accelerate the pace of introduction of exciting new products and the provision of sustained value to our customers for the explosive growth in bandwidth demand anticipated in the access and metro markets."

The two companies plan to continue to offer optimized system solutions for optical access and metropolitan networks, for which demand is expected to grow. Joint development efforts will therefore also focus on extending the product lineup by the addition of 622 Mbps and 2.5 Gbps modules.

Hitachi Ltd, headquartered in Tokyo, Japan is one of the world's leading global electronics companies, with fiscal 1996 (ending March, 31 1997) consolidated sales of 8.523 Billion yen (68.7 billion dollar*). The company manufactures and markets a wide range of products, including computers, semiconductors, consumer products and power and industrial equipment. For more information on Hitachi Ltd, please visit its Web site at http://www. hitachi.co.jp. * At an exchange rate of 124 yen to the US dollar.

The Optoelectronics Division of Nortel develops and manufactures a complete range of active and passive components and low speed modules for the optical network including long haul, metro and access networking applications. Consisting of high reliability, high performance and cost-effective lasers, receivers, amplifiers and passive products, the company's portfolio delivers valuable, leading-edge solutions for telecom, datacom and CaTV applications. Nortel had 1997 revenues of US 15.5 billion dollars and has approximately 73,000 employees worldwide. For more information , please visit Nortel's web-site at http://www.nortel.com

WRITTEN BY Secretary's Office
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