Hitachi to transfer fiber optic components business unit to OpNext Japan

Hitachi, Ltd. announced that on January 31, 2001, it will transfer its Fiber Optic Components Business Unit to OpNext Japan, Inc., a subsidiary Hitachi established in September 2000 to strengthen its fiber optic components business.

To ensure its ability to respond to the fast-growing optical components market, in September 2000, Hitachi established a U.S. subsidiary, OpNext, Inc., to conduct Hitachi�s fiber optic components business in the U.S. At the same time, Hitachi established OpNext Japan to separate its Fiber Optic Components Business Unit of the Telecommunications & Information Infrastructure Systems Group.

In December 2000, Hitachi and OpNext Japan entered into an agreement covering the transfer, and investigation by an inspector was completed on January 17. Hitachi will transfer the Fiber Optic Components Business Unit to OpNext Japan on January 31, and OpNext Japan will start operations on February 1.

Also in February, OpNext Japan�s stock, wholly owned by Hitachi, will be invested in OpNext. Following this transaction, OpNext will raise its capital by issuing new shares up to $450 million to Clarity Group, a U.S.-based equity partnership. OpNext plans to use the investment to set up a globally integrated operation and expand its fiber optic components business.

In its unconsolidated financial results for the fiscal year ending March 31, 2001, Hitachi will include an extraordinary gain of approximately 23.1 billion yen arising from the transfer of its Fiber Optic Components Business Unit. Hitachi will also include an extraordinary loss of approximately 13.9 billion yen for restructuring expenses involved in a restructuring of the business operations of a U.S. subsidiary, Hitachi Data Systems, for expanding its storage solutions business; and an extraordinary loss of approximately 11.8 billion yen for expenditures involved in reorganizing television manufacturing operations in a U.K. subsidiary, Hitachi Home Electronics (Europe) Ltd. Hitachi will also include extraordinary gains resulting from the sale of land and marketable securities.

At this point, the company is not changing its forecasts of consolidated or unconsolidated results for the fiscal year ending March 31, 2001.