The new company, named Hitachi Global Storage Technologies, which comprises the HDD operations of Hitachi and IBM, is headquartered in San Jose, California. The new company is 70 percent owned by Hitachi, with the remainder of the shares held by IBM. Hitachi, however, will assume full ownership at the end of 2005. IBM will have no involvement in the management of Hitachi Global Storage Technologies.

Hitachi and IBM reached a framework agreement in June last year under which Hitachi would purchase IBM's HDD operations for US$2.05 billion. Since then, the two companies reached agreements regarding all related matters, including contracts for the supply of HDDs to IBM, treatment of intellectual property and the provision of services. Based on these agreements, and a revision in operating bases and personnel covered by this acquisition, the deal closed on December 31, 2002.

As an entity specializing in HDDs, Hitachi Global Storage Technologies will bring together the mutually complementary qualities of both its founding companies. Hitachi boasts cutting-edge R&D capabilities, such as in perpendicular magnetic recording technology. Having invented the HDD, IBM has extensive technological expertise backed by an industry-leading number of patents, and top-level product development capabilities. With an expanded product lineup, increased production capacity, and enhanced global development, production and sales networks as a result of this integration, Hitachi Global Storage Technologies is in an extremely competitive position.

"The completion of this deal changes everything in the storage industry -- no one else has the depth of knowledge and the breadth of technology that we have to offer," said Dr. Jun Naruse, chief executive officer, Hitachi Global Storage Technologies. "Customers will see new HDD technologies reach the marketplace more quickly than ever before, helping them meet their growing needs for versatile, robust and economical storage technologies."

The company will provide the most extensive line of HDDs in the industry, covering every major segment from consumer-focused 1-inch to enterprise-level 3.5-inch products. The worldwide sales and support capabilities of Hitachi Global Storage Technologies will provide customers with unequaled access to products and services.

Hitachi Global Storage Technologies aims to use its world-class R&D capabilities and state-of-the-art technologies to be a driving force behind further advances in the HDD format. The new company is determined to be a leader in the HDD industry by developing products and offering support in a timely manner to meet various needs in the IT market. HDDs are expected to be in increasing demand for use in mobile terminals, PCs, servers and other information appliances, as well as emerging consumer electronics market, like car navigation systems, set-top boxes and other products.

Powerful hardware is a vital element of efforts to bolster the Hitachi Group's solutions delivering abilities. Hitachi also sees the opportunity to capture many synergies with Hitachi Global Storage Technologies in the Hitachi Group's consumer electronics operations, including information appliances. In the field of redundant array of independent disks (RAID) storage systems, in particular, Hitachi hopes to develop worldwide storage solutions that take advantage of Hitachi Global Storage Technologies' powerful HDDs.

One of Hitachi's overarching goals is to leverage its competitive edge in HDDs to exercise leadership in the IT industry by building the infrastructure needed to support a ubiquitous information society.

Hitachi Global Storage Technologies commenced operations on January 1, 2003, integrating IBM's HDD production and marketing bases with Hitachi's U.S. HDD sales division. On April 1, plans call for Hitachi, Ltd.'s Data Storage Systems Division, which operates an HDD manufacturing facility in Kanagawa Prefecture, to be integrated with the Japanese subsidiary of Hitachi Global Storage Technologies by taking advantage of Japan's corporate split law. Plans are also in hand for all Hitachi's HDD production and sales locations, including sales operations in Europe and Asia, to join Hitachi Global Storage Technologies.

Profile of the New Company (As of April 1, 2003)
Company name: Hitachi Global Storage Technologies, Inc. (Headquartered in the U.S.)
Stockholders' Equity: US$2.029 billion (on establishment)

Top management team:

Yoshiro Kuwata, (non-resident) Chairman of the Board (Executive Vice President and Director, Hitachi, Ltd.) Jun Naruse, CEO (Managing Officer, Hitachi, Ltd.) Douglas Grose, COO (formerly general manager of IBM's Storage Technology Division) Ryuichi Yagi, CFO (Managing Officer, Hitachi, Ltd.)

Development locations: A total of 5 bases in the U.S. and Japan

Manufacturing locations:

8 bases in 7 countries-the U.S., Japan, the Philippines, Singapore, Mexico, China and Thailand

Sales locations:

Bases in 13 countries / regions, including the U.S., Japan, England, Germany, France, Singapore, China and Taiwan

Main products: 3.5-, 2.5-, 1.8- and 1.0-inch HDDs
Employees: Approx. 21,500 (Hitachi, approx. 6,800; IBM, approx. 14,700)
Fiscal year end: December 31

About Hitachi
Hitachi, Ltd., headquartered in Tokyo, Japan, is a leading global electronics company, with approximately 320,000 employees worldwide. Fiscal 2001 (ended March 31, 2002) consolidated sales totaled 7,994 billion yen ($60.1 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 http://global.hitachi.com.