FOR IMMEDIATE RELEASE

Progress on the "i.e.HITACHI Plan II" Medium-Term Management Plan
Tokyo, February 4, 2004 --- Hitachi, Ltd. (NYSE:HIT / TSE:6501) today announced progresswith initiatives designed to achieve positive FIV* (Future Inspiration Value) in fiscal 2005, agoal of its current medium-term management plan, “i.e.HITACHI Plan II.”
Hitachi is realigning its business portfolio based on reviews of the activities and growthpotential of all businesses. With many of the acquisitions and joint ventures conducted thus
far having proven successful, targeted businesses are expected to grow between now andfiscal 2005.
Moreover, Hitachi is actively making investments in R&D in the ubiquitous application
products, the automotive equipment, biomedical and other businesses, all of which areexpected to expand from fiscal 2006 onward. Advanced research, the wellspring of future
growth, is another area where Hitachi is bolstering R&D.
At present, Hitachi expects it will be capable of generating consolidated operating income inexcess of 400 billion yen on net sales in the order of 9 trillion yen in fiscal 2005. Based onthis assumption, Hitachi expects to generate positive FIV that year.
＊ FIV is Hitachi’s economic value-added evaluation index in which the cost of capital is deducted fromafter-tax operating profit. After-tax operating profit must exceed the cost of capital to achieve positive FIV.

- more --21. Progress With Realigning the Business Portfolio and Measures to Increase
Profitability
Hitachi is projecting that consolidated net sales in fiscal 2005 will be approximately 650
billion yen higher than in fiscal 2002 due to the acquisition of IBM Corporation’s hard diskdrive (HDD) operations, the acquisition of Sumitomo Special Metals Co., Ltd. by Hitachi
Metals, Ltd. and other business portfolio realignment actions. Conversely, the transfer ofHitachi, Ltd.’s semiconductor operations to joint venture Renesas Technology Corp. and otherdevelopments are expected to lower net sales over the same period by approximately 540
billion yen.
The integration of semiconductor operations in joint ventures, which are accounted for as
equity-method affiliates, has bolstered competitiveness and improved earnings.
In the display business, earnings have improved significantly by changing the product mix.
The focus in this business has shifted from the highly volatile notebook PC market to small
and medium-size LCD panels, particularly for the expanding market in Japan for mobilephones featuring color screens. Growth in LCD panels for flat panel TVs is another factor
behind the improvement in earnings. At this time, Hitachi has decided to invest an additional
12 billion yen in a production line for low-temperature polysilicon TFT LCDs in response toincreasing demand for mobile phones equipped with high-resolution color displays.
In the consumer business, Hitachi Home & Life Solutions, Inc. has initiated structural reforms,
mainly focused on reducing fixed expenses. Initiatives such as expanding sales in Japan ofhome appliances manufactured overseas are intended to give the company a more competitivestructure, particularly regarding fixed costs, with which it can expand its business goingforward. Meanwhile, Hitachi, Ltd.’s Ubiquitous Platform Systems Group has reorganized andintegrated bases producing CRT TVs, VTRs and other existing audio-visual products in Japanand overseas, while refocusing on digital consumer electronics, a category which includes
plasma TVs, projection TVs and optical storage drives.
In addition to these initiatives, Hitachi has been pushing ahead with Corporate Innovation
Initiative II to improve profitability. Measures include upgrading cash flow management andinitiatives to reduce expenses. Moreover, Hitachi is continuing with measures designed tonurture employees and create new businesses, including the establishment of virtual venturecompanies by “corporate senior staff.” The objective is to turn venture companies intofull-fledged businesses much in the same manner as Hitachi has done with Mu-Solutions.
With FIV as its key management benchmark, Hitachi is thus working on many fronts to- more --3improve profitability while creating attractive products and services that dovetail withcustomer needs.
2. Measures for Continuous Growth
In tandem with business portfolio realignment, Hitachi is pushing ahead with measures toensure growth over the medium and long terms. Investments are being made in R&D in theautomotive equipment, battery, biomedical and other businesses, all of which are expected togrow significantly going forward. An example is a pilot production line for rechargeable
lithium-ion batteries.
Businesses where Hitachi can best leverage its strengths, in an environment where elemental
technologies and markets now cut across several different business groups, will be designatedas “Inspire A Businesses.” Hitachi is prepared to take whatever steps are necessary tostrengthen these businesses, including strategically allocating funds and establishing anoperating framework that facilitates collaboration across many businesses in the HitachiGroup.
In Information & Telecommunication Systems, efforts are being made to upgrade Hitachi’sdevelopment capabilities with respect to disk array subsystems, HDDs and other hardware, as
well as middleware and other software. Hitachi will explore alliances with other companies
and conduct M&As, as required, to better facilitate the provision of total solutions in this field,
which is a key component of a ubiquitous information society.
In Power & Industrial Systems, structural reforms are being implemented to Hitachi, Ltd.’sPower & Industrial Systems Group to improve earnings.
In the display business, Hitachi is continuing with the development of a next-generation
display device that achieves high picture quality and low power consumption.
Hitachi has positioned the consumer market as an important market for providing “New Era
Lifeline Support Solutions.” At the heart of this stance is establishment of the Consumer
Business Strategy Division to open up new markets through a business modeltransformation—switching from a household appliance business operated along individual
product lines to a consumer products business that directly supports individuals’ lifestyles as avital part of the social infrastructure. Headed by President and CEO Etsuhiko Shoyama, thisnew body’s activities will extend beyond the scope of the current consumer field. It willcapitalize fully on the resources of Hitachi’s consumer products business as well as theinvolvement Hitachi Air Conditioning Systems Co., Ltd. and Hitachi Industrial Equipment- more --4Systems Co., Ltd. have in the technology and business spheres. The goal is to create viableconsumer business models for the ubiquitous era.
Moreover, Hitachi is actively investing in advanced research fields that are of common
interest to the Group. These are fields in which the Hitachi Group can give full play to its
strengths from a long-term perspective.
Together, these investments, including ongoing investments in IT to facilitate faster
decision-making, are intended to support consistent growth.
Hitachi is accelerating the pace of its transformation into a highly profitable organization as it
aims to expand and achieve positive FIV in fiscal 2005, a goal of “i.e.HITACHI Plan II,” andgenerate consistent growth afterward.

Cautionary Statement
Certain statements found in this document may constitute “forward-looking statements” as defined in the U.S.
Private Securities Litigation Reform Act of 1995. Such “forward-looking statements” reflect management’s
current views with respect to certain future events and financial performance and include any statement that does
not directly relate to any historical or current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,”“intend,” “plan,” “project” and similar expressions which indicate future events and trends are used to assist
readers in identifying these “forward-looking statements.” Such statements are based on currently available
information and are subject to various risks and uncertainties that could cause actual results to differ materiallyfrom those projected or implied in the “forward-looking statements” and from historical trends. Certain“forward-looking statements” are based on current assumptions of future events which may not prove to beaccurate. Undue reliance should not be placed on “forward-looking statements,” as such statements speak only
as of the date of this document.
Factors that could cause actual results to differ materially from those projected or implied in any“forward-looking statement” and from historical trends include, but are not limited to:- rapid technological change, particularly in the Information & Telecommunication Systems segment andElectronic Devices segment;- uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate newtechnology on a timely and cost-effective basis and to achieve market acceptance for such products;- fluctuations in product demand and industry capacity, particularly in the Information & Telecommunication
Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment;- increasing commoditization of information technology products, and intensifying price competition in themarket for such products;- fluctuations in rates of exchange for the yen and other currencies in which Hitachi makes significant sales orin which Hitachi’s assets and liabilities are denominated, particularly between the yen and the U.S. dollar;- uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing,particularly in the context of limited credit availability currently prevailing in Japan;- more --5- uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact offluctuations in product demand and/or exchange rates;- general economic conditions and the regulatory and trade environment of Hitachi’s major markets,particularly, the United States, Japan and elsewhere in Asia, including, without limitation, continued
stagnation or deterioration of the Japanese economy, or direct or indirect restriction by other nations onimports;- uncertainty as to Hitachi’s access to, and ability to protect, certain intellectual property rights, particularly
those related to electronics and data processing technologies;- uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may notcontrol, with other corporations in the design and development of certain key products; and- uncertainty as to general market price levels for equity securities in Japan, declines in which may require
Hitachi to write-down equity securities it holds.
The factors listed above are not all-inclusive and are in addition to other factors contained in Hitachi’s periodic
filings with the U.S. Securities and Exchange Commission and in other materials published by Hitachi.

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Information contained in this news release is current as of thedate of the press announcement, but may be subject to change
without prior notice.
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