News Releases

11/01/2006

HITACHI TO ANCHOR 2.5-INCH HARD DRIVE LEADERSHIP WITH QUARTER-TERABYTE PRODUCT

-- Hybrid & Security Features Enhance New Product Offerings; Company Readies Technology Roadmap for Projected Doubling of 2.5-inch Segment in 2010 --

SAN JOSE, Calif. – Nov. 1, 2006 – Following a 36-percent quarter-over-quarter growth in unit shipment1, Hitachi Global Storage Technologies (Hitachi) is today unfolding a 2007 product strategy intended to secure the company’s position as segment and technology leader for 2.5-inch hard drives. With two new products offering capacities in excess of 200 gigabytes (GB) of storage and a sustained track record of technology leadership in this product segment, Hitachi is positioned to continue its undefeated 2.5-inch leadership record into 2007 and beyond.

The Hitachi Travelstar product line has maintained its position as the world’s most popular 2.5-inch hard drive for nearly 15 years2. Over the next several years, the opportunity in the 2.5-inch segment is expected to grow significantly, and Hitachi is preparing to capture that growth. By 2010, industry analyst firm IDC predicts 2.5-inch hard drive annual shipments will double to 224 million units from 118 million in 20063. At that time, Hitachi believes the highest-capacity 2.5-inch product may be in the 750-GB range.

In the near term, the anchor element of the Hitachi 2007 2.5-inch plan is a new product that is expected to offer leadership performance and storage capacity in a 200-GB, 7200 RPM package, slated for availability in the first half of 2007. This combination of high capacity and high performance underscores Hitachi’s established position as manufacturer of the most powerful 2.5-inch hard drive.

The second Travelstar product, a 5400 RPM hard drive, will offer storage capacity in the quarter-terabyte range and is expected in the second half of 2007. The new products will also provide hard-drive-level data encryption as a new feature for added security. In addition, Hitachi is offering a flash memory/hard drive hybrid option for enhanced battery life, greater performance and increased reliability.

Hitachi’s new 2.5-inch hard drives are expected to continue the industry-leading performance characteristics of their predecessors. Both Travelstar drives will use perpendicular magnetic recording (PMR) technology, building upon the highly successful volume ramp of Hitachi’s debut PMR hard drive, the Travelstar 5K160.

“The Travelstar products we have planned for 2007 give insight to what Hitachi believes are important to end-users in a mobile storage product: ample capacity for video and other rich content, superior performance and reliability, and greater confidence in the safety of their data as users are increasingly on the move,” said Shinjiro Iwata, corporate marketing officer, Hitachi Global Storage Technologies. “The 2.5-inch hard drive segment represents Hitachi’s flagship product line, and we’re working to ensure that Hitachi continues to set the pace of technology advancement for this category.”

Hitachi’s new product developments will put the company in position to take advantage of IDC’s projected 22-percent compounded annual growth rate (CAGR) of the 2.5-inch segment from 2005 to 20104.

“A growing number of mobile PC users are placing a high value on storage capacity, performance, reliability and security while on the go,” according to John Rydning, IDC’s Research Manager for hard disk drives. “There is a tremendous opportunity for HDD OEMs such as Hitachi to establish market leadership by delivering high capacity mobile 2.5-inch disk drives equipped with value-added features to meet these challenging requirements.”

IDC’s projection of the 2.5-inch hard drive growth shows the greatest opportunity to be in the portable PC category, followed by gaming consoles, external storage and automotive applications5. Hitachi participates in all of those segments and leads segment share in the portable PC category.

The hard drive industry has used low-capacity flash memory for many years to store the firmware that controls the entire hard disk drive. With the decreasing cost of flash, Hitachi believes there is greater opportunity to increase the value of hard drives by storing some system functions to flash memory rather than on the disk. The potential benefit of a hybrid storage solution – especially for mobile devices – ranges from longer battery life, faster boot-up time and recovery from hibernation, to greater reliability and higher performance.

Combined with low-cost, high-capacity storage, the hybrid solution presents a significantly higher-value hard drive, especially in mobile product segments. New 2.5-inch products shipped in 2007 will offer hybrid as an option on the same base platform.

Today, users are able to protect their hard drive with password security which prevents access to the drive but does not encrypt the data itself. Traditionally, for those who wished to secure their drives, the only viable solution was to use a software-based tool, which could slow down the system performance.

With the rise in notebook theft and the relative ease in which software-based password security can be compromised, Hitachi is responding with a hard-drive-level encryption solution that is virtually impenetrable. In addition, Hitachi’s introduction of full data encryption at the hardware level, allows data security to be carried out with little to no impact to system speed. Hitachi’s version of hard-drive-level data encryption scrambles data using a password-generated key as it is being written to the disk and then descrambled with the key as it is retrieved.

In hybrid hard drives, Hitachi’s security technology encrypts data in both the flash memory and hard drive for the highest level of security. Hitachi employs the Advanced Encryption Standard (AES) algorithm, the industry standard for data encryption technology.

Hitachi’s data encryption technology will be offered as a new feature on all new 2.5-inch hard drives shipped in 2007 and beyond. Notebook manufacturers and other customers will have the choice of whether to implement this feature on their systems.

1 Based on Hitachi 2Q06 to 3Q06 shipment data (7.1 million to 9.6 million units)

2 IBM entered the 2.5-inch hard drive business in January 1991 and maintained the number one share position until selling the business to Hitachi in 2003; Hitachi has since defended this leadership share position

3, 4, 5 IDC, Worldwide Hard Disk Drive 2006-2010 Forecast and Analysis: Record-Breaking Years Lie Ahead, Doc #201478, May 2006

Hitachi Global Storage Technologies is a storage technology leader, founded in 2003 through the combination of Hitachi’s and IBM’s hard disk drive businesses. Hitachi GST enables users to fully engage in the digital lifestyle by providing high-value hard drives in formats suitable for the office, on the road and in the home.

With its legacy in hard drive invention, Hitachi GST will lead the industry in celebrating the hard drive’s golden anniversary in 2006. After five decades of innovation, the hard drive has had a profound effect on the computing and consumer electronics industries. That heritage lives on at Hitachi GST through products that define the standard for hard drive miniaturization, capacity, performance and reliability.

With more than 30,000 employees worldwide, Hitachi GST offers a comprehensive range of hard drive products for desktop computers, high-performance servers, notebooks and consumer devices. For more information, please visit the company’s web site at www.hitachigst.com.

Hitachi, Ltd., (NYSE: HIT / TSE: 6501), headquartered in Tokyo, Japan, is a leading global electronics company with approximately 356,000 employees worldwide. Fiscal 2005 (ended March 31, 2006) consolidated sales totaled 9,464 billion yen ($80.9 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 website at http://www.hitachi.com.

Statements in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding the company’s expectations, objectives, anticipations, plans, hopes, beliefs, intentions or strategies regarding the future. Forward-looking statements in this press release include, without limitation, statements regarding: 2007 product strategy and features and capacities of new products. Factors that could cause actual results to differ materially from the forward looking statements include risks and uncertainties, such as: any unforeseen event; possible delays in developing and marketing new products; possible component parts shortages; employment issues at our manufacturing facilities; changes in customer needs; new products and services offerings by the company and its competitors; and other risks indicated in Hitachi, Ltd.’s filings with the United States Securities and Exchange Commission.