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. 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. 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.

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, chief 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."

2.5-inch Segment Acceleration

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.

Hybrid: A Higher-Value Hard Drive

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.

Hard Drive Bulk Data Encryption

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