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Hitachi and LG Electronics agree to establish optical disk drive joint venture
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Tokyo, Japan, October 5, 2000 --- Hitachi, Ltd. (NYSE: HIT) and LG Electronics Inc. today announced that they have reached an agreement under which the two companies will establish a joint venture company for the development, design and marketing of optical disk drives such as CD and DVD drives. The new company will combine Hitachi's strengths in the area of DVD-ROM/RAM drive development technology, with LG's world-class competitive capabilities in the area of manufacturing and marketing of CD-ROM and CD-RW drives, with the aim of becoming one of the world's leading vendors of optical disk drives. On November 1, the new company, named Hitachi-LG Data Storage, Inc., will be established in Tokyo, and on December 1, a subsidiary will be established in Korea. Techno Systems Research Co., Ltd. estimates the worldwide market for optical disk drives as being close to 200 million units, and expects the solid pace of growth to continue, reflecting the expansion of the PC market. At the same time, the market is undergoing a major change in terms of the type of media used, with CD giving way to DVD, and read-only formats to recordable/rewritable types. This is generating increasing international competition in terms of development and cost, which is likely to continue to intensify. Through its Digital Media Group, Hitachi was the first company to release DVD-RAM drives for PCs, and therefore already has a considerable store of related technology and expertise. Hitachi was also the first to market a DVD camcorder, as the company focuses on becoming the leading presence in the area of convergence between PC and AV product technologies. LG's Digital Media Company operations include optical storage as well as AV and PC products. In particular, the company has been focusing development resources on CD-ROM and CD-RW, which are now its mainstream products. In its development and manufacturing activities, the company is highly competitive which, combined with the efficiency of its marketing operations, has made it one of the leading companies for CD drives. This alliance will enable the two companies to share resources and reduce procurement and development costs involved in responding to diversifying product requirements, resulting in products that are even more competitive. In addition to combining their strengths in optical disk drives, the two companies are also focusing on speedier management to match the increased pace of market change, in order to consolidate their position of global leadership. Hitachi, Ltd., headquartered in Tokyo, Japan, is one of the world's leading global electronics companies, with fiscal 1999 (ended March 31, 2000) consolidated sales of 8,001 billion yen ($75.5 billion*). 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 Hitachi's Web site at http://www.hitachi.co.jp. *At an exchange rate of 106 yen to the dollar. LG Electronics is a major global player in electronics & telecommunications, operating 60 subsidiaries in 34 countries with 54,000 employees worldwide. LGE focuses on Digital TV, CD-RW, CD-ROM, DVD-ROM Drives, PCs, Monitors, Mobile Handsets and PDPs. LGE is strengthening core competencies even more to further its reputation as the "Digital Leader" in electronic products and equipment in the digital era. LGE is headquartered in Seoul, Korea, and was founded in 1958. Additional information is available at www.lge.com.
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WRITTEN BY Corporate Communications Division |