FOR IMMEDIATE RELEASE

Hitachi Unveils Next Medium-Term Management Plan“i.e.HITACHI Plan II”
Tokyo, January 30, 2003 --- Hitachi, Ltd. (TSE:6501/NYSE:HIT) today unveiled its
next medium-term management plan, “i.e.HITACHI Plan II.” The plan calls for Hitachi
to fully leverage its greatest strength, namely its ability to create new businesses byfusing technologies and knowledge. Other imperatives include exiting certain
businesses that currently account for approximately 20% of Hitachi’s net sales, andrealigning its business portfolio to expand targeted business domains. FIV* (Future
Inspiration Value) will be used to make decisions to exit, strengthen or incubate various
businesses.
*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.

The Hitachi Group has obtained a vast store of knowledge grounded on a variety ofexperiences and expertise gained through businesses with various customers. To sustain
its business in the future, Hitachi must provide products and services in the form ofsolutions that satisfy customer requirements. Indeed, the provision of solutions thatsatisfy customers is the key to generating earnings. Hitachi’s realignment of its businessportfolio using FIV is also a way of selecting and eliminating businesses from thestandpoint of customers.
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Hitachi is positioning the three-year period that runs through fiscal 2005 (ending inMarch 2006) as a key juncture for pushing through major reforms of its operating
framework and focusing on highly profitable businesses. Central to this aim is arenewed focus on generating a high level of earnings, rather than driving sales growth.
Hitachi will exit businesses that now generate a combined 20% of current net sales, but
expects net sales to remain largely flat through measures to expand targeted businessdomains and new businesses, as well as to achieve positive FIV in fiscal 2005.
Critical to achieving positive FIV in fiscal 2005 is following up on progress madetowards the goals of the new medium-term management plan. Another imperative isannually updating actions prescribed by the plan. These processes will allow Hitachi toimplement a variety of measures to achieve its goals, including additional measures as
deemed necessary.
Hitachi will strengthen Group management. Key actions include the adoption of theCommittee System at Hitachi and major Hitachi Group companies. This move is being
made in accordance with recent revisions to Japan’s Commercial Code. Under thissystem, Hitachi will invite outside directors. Also, Hitachi directors and executive
officers will be represented on the boards of group companies as outside directors andgroup companies’ directors will be represented on Hitachi's Board of Directors.

1. Fiscal 2005 Goals of “i.e.HITACHI Plan II”
n Achieving positive FIV
n Operating margin of at least 5% (Information & Telecommunications Systems: atleast 7%; Power & Industrial Systems: at least 4%)n ROE of at least 8%
n Maintain a single-A grade long-term credit rating
2. Key Measures of “i.e.HITACHI Plan II”
Hitachi will continue to realign its business portfolio using FIV as a benchmark,channeling more resources into targeted businesses. Hitachi will also implement groupwide measures that include promoting the creation of new businesses that capturesynergies and strengthening its financial position.
- more --3-nRealignment of Business Portfolio: Exit Businesses Totaling 20% of Net Sales,
While Increasing Earnings by Bolstering Targeted Businesses and Creating
New Businesses
Hitachi will focus resources on “New Era Lifeline Support Solutions” and “Global
Products Incorporating Advanced Technology” to strengthen targeted businesses.
Hitachi will transform budding ventures into future core businesses by fusing its
superior technologies and knowledge to satisfy the demands of society. Hitachi isalready focused on four targeted areas: “IT-Based Quality Lifestyle Solutions,”“Sustainable Environmental Solutions,” “Advanced Healthcare Solutions” and“Intelligent Management Solutions.”
Hitachi will exit certain businesses, together accounting for roughly 20% of net sales, as
candidates for withdrawal, based on their lack of synergy with targeted businessdomains or the difficulty of achieving positive FIV. Hitachi will move to implement
these actions in the early stages of the new plan. Details will be announced as soon as
they are finalized.
nAccelerate Globalization: Identify Businesses Suitable for Globalization and
Focus Resources on Strengthening Them
Hitachi will identify businesses and products with the potential to rank among the top
three in their global markets, treating them as businesses suitable for globalization. By
channeling resources into these businesses, Hitachi will strengthen its global
competitiveness and drive further growth.
In China, where continued high growth is expected, Hitachi will be shifting to a new
operating framework that permits greater efficiency, after reviewing the current
framework from the perspective of strengthening sales capabilities.
n CII (Corporate Innovation Initiative) II
Emphasis on Frontline Operations: Hitachi will emphasize problem solving by vesting
responsibility and authority closer to the frontline, while clarifying goals for eachfrontline, including marketing, product development and manufacturing.
- more --4-“Inspire A Business”: Strategic businesses that Hitachi will reinforce will be designatedas “Inspire A Business.” Hitachi will implement a diverse range of measures tostrengthen these businesses including strategically allocating funds, as necessary, andestablishing an operating framework that facilitates collaboration across manybusinesses.
Project C II: Hitachi will continue to strengthen cash-flow management by improving
the efficiency of working capital while selectively making investments using FIV. The
goal is to continuously improve free cash flow.
Project D: Hitachi will work to further reduce procurement costs, building on the resultsof its Procurement Renewal Project (PRP).
n Raise Motivation and Utilize Human Resources Effectively
Hitachi will establish a framework that facilitates rapid execution of projects involving
multiple departments and promote the dynamic allocation of human resources to wider
fields of endeavor. In addition to a personnel database called the Human Capital Data
Base, Hitachi will introduce the 360-degree Feedback Program to managers and higher
posts, the Free Agent Policy (in-house job seeking policy), e-learning and ecommunication systems. By utilizing these measures, Hitachi will change its corporate
culture dynamically.
Hitachi is also concentrating efforts on fostering human resources that can succeed on
the global stage, and developing future candidates for senior management posts, by
supporting skill development programs and the exchange of personnel among HitachiGroup companies.
n Hitachi and Major Group Companies to Adopt the Committee System
Hitachi and 18 publicly-held group companies will alter their corporate governancestructure by adopting the Committee System, which will ensure effective supervision ofmanagement and transparency, while clarifying accountability and authority at thebusiness execution level to run Hitachi’s businesses with greater agility. This measure is
subject to approval at the Ordinary General Meeting of Shareholders of Hitachi andeach group company and by their respective Board of Directors. Under this new system,
certain group companies’ directors will be represented on Hitachi’s Board of Directors,
and Hitachi directors and executive officers will be represented on the boards of groupcompanies as outside directors. This will produce a corporate governance structurethat will facilitate “strategically integrated management,” capture synergies at theconsolidated level and promote innovation by fusing strengths.
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3. Targeted Businesses in “i.e.HITACHI Plan II”
3-1. Vision for Hitachi: “Best Solution Partner”
Under the incumbent “i.e. HITACHI Plan,” which runs through fiscal 2002, Hitachi
provided information systems services and social infrastructure systems that fully
leverage Hitachi’s IT and knowledge—plus the key hardware, software and highly
functional materials and components—with efforts directed at becoming the “bestsolution partner.” Another initiative was structural reforms designed to transform
Hitachi into a global supplier capable of providing total solutions in its targeted fields.
Building on this basic approach, the new “i.e.HITACHI Plan II” targets two primarybusiness domains—“New Era Lifeline Support Solutions,” which further fuse andenhance information system services, such as systems integration and services, andsocial infrastructure systems, such as power systems; and “Global Products
Incorporating Advanced Technology,” where Hitachi aims to achieve strong growth inglobal markets, focusing on technologies, as well as high performance hardware andsoftware, that incorporate knowledge from several disciplines. Hitachi will work todifferentiate itself from competitors by capturing synergies between these two businessdomains.
3-2. “New Era Lifeline Support Solutions”
In the course of its history, Hitachi has gained extensive experience and expertise insocial infrastructure systems, as well as cutting-edge technologies and knowledge in
information system services. “New Era Lifeline Support Solutions” encompass a wide
range of fields, from traditional electricity, gas and water utilities to information
domains, which are an emerging social infrastructure. In this rapidly growing field,
Hitachi hopes to bring together its knowledge, technology and expertise to create newvalue. In this regard, fields that give full play to Hitachi’s strengths include existing
SAN/NAS Storage Solutions as well as biomedical business fields and solutions thatincorporate mu-chips, the world’s smallest, radio frequency identification (RFID) IC
chips, which are set to give rise to a promising new business.
Looking ahead, Hitachi will flexibly initiate projects that span businesses in fields thattranscend business group or company boundaries, to satisfy new market and customer
demands. Hitachi is already on the move.
- more --6-<Examples of Targeted Businesses>
n SAN/NAS Storage Solutions
Hitachi will work to further enhance the high-performance functions of disk array sub
systems, where Hitachi holds a high global market share. Also, Hitachi will further
strengthen storage solutions, combining these systems with data storage management
software employing system operations management technology. Hitachi has a leading
track record in these technologies in Japan. Another priority will be to deepen strategic
alliances with overseas partners to reinforce Hitachi’s businesses on a global scale.
Through these measures, Hitachi is targeting sales of approximately 400 billion yen in
fiscal 2005, which corresponds to a 50% increase compared to fiscal 2002.
n Biomedical Business
The biomedical market is being reshaped by the growing reliance on advanced medical
treatment, the advent of personalized medical services and medical applications ofbiotechnology. Opportunities for the Hitachi Group are clearly multiplying. Hitachi
established the Medical Strategy Council in October 2002 to spearhead the formulationof Group-wide strategies aimed at increasing the profitability of the mainstay medical
diagnostic systems business and rapidly developing new businesses with high-growthpotential. Focusing resources on three strategic emerging domains will carry Hitachi tothis goal. The first domain is Advanced Diagnosis and Therapy, which will provide
diagnostic and therapeutic systems that employ cutting-edge technologies, such as
Positron Emission Tomography (PET) cancer diagnosis, proton beam cancer therapy,
intelligent operating rooms and robot-assisted surgery. The second is Applied Medical
Biotechnology. Hitachi will break into the fields of DNA diagnosis and tissue
engineering by fully capitalizing on technologies and expertise gained from experiencein developing biotechnology research equipment, such as DNA sequencers, where
Hitachi holds a high global market share, and in the outsourcing business of bioanalysis. The third domain is Medical Services, which involve sales of home diagnostic
devices and related services. Demand is expected to grow rapidly in the diabetes
prevention and treatment market and for management support systems for hospitals.
Hitachi is targeting sales of 400 billion yen in fiscal 2005, which corresponds to an 80%
increase compared to fiscal 2002.
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n Urban Redevelopment Business

Hitachi will develop comprehensive solutions that support the entire lifecycle of urbanneighborhoods to meet emerging needs for urban redevelopment in Japan, a market thatpromises to grow rapidly in the future. Beginning with urban planning, Hitachi will
perform many tasks: basic surveys, such as checking for soil contamination; totalbuilding facility solutions that cover earthquake-resistance systems, network and IT
systems, elevators and air conditioning systems; total solutions relating to building
management, which address everything from security to power-supply management;
efficient building renewal solutions; and building material recycling services when thebuilding is eventually torn down. Hitachi is targeting sales of approximately 300 billion
yen in fiscal 2005, which corresponds to a 10% increase compared to fiscal 2002.
n Strategic Outsourcing Business
Hitachi is focusing on the Strategic Outsourcing Business, which targets fields where
Hitachi can deliver a comprehensive range of knowledge, expertise and technologies
from experience in a diverse range of businesses to help customers run their businesses.
These fields include IT systems operations, shared services and financial services.
Under certain circumstances, Hitachi will form joint ventures with client companies toproactively initiate businesses. Hitachi projects sales of 130 billion yen in 2005, whichcorresponds to a 170% increase compared to fiscal 2002.
n Railway Systems Business
The Railway Systems business is based on two main technological concepts. One is the
B-System, which employs broadband networks to enable multimedia passenger services,
remote maintenance and optimum total control of inverters. The other is the A-Trainconcept, which is a collection of advanced technologies that includes an aluminum
double skin structure, Friction Stir Welding Technology and module interior. Hitachi
targets sales of approximately 80 billion yen in fiscal 2005, which corresponds to a 10%
increase compared to fiscal 2002. Key measures aimed at meeting this target include
strengthening alliances with signal manufacturers, and entering into the leasebusinesses.
- more --8-n Mu-Chip (World’s Smallest RFID IC Chips) Solutions
Mu solutions feature Hitachi’s mu-chip—a key device for creating a safe andcomfortable ubiquitous information society. These solutions are proving useful in a
growing number of settings, such as management of steel products and tickets to the2005 World Exposition, Aichi, Japan. The mu-chip is small enough to be embedded in
paper and is equipped with advanced security functions. Leveraging these outstanding
features, Hitachi is joining hands with customers and partners worldwide to build new
business models in a variety of fields, ranging from product supply chains to quality
assurance and authentication. Hitachi aims to create a new market and generate sales ofapproximately 15 billion yen from mu-chip solutions in fiscal 2005. Hitachi is aiming toachieve further growth in fiscal 2006 and thereafter.
3-3. Global Products Incorporating Advanced Technology
Hitachi views the confidence placed in its products by its customers as an importantsource of trust in the entire organization. Since its establishment in 1910, Hitachi has
been identified with the creation of reliable products incorporating advanced technology.
Looking ahead, Hitachi will continue to pour its energy into “Global Products
Incorporating Advanced Technology,” which mainly include hardware and software
combining both highly competitive technologies and interdisciplinary knowledge.
Developed to drive high growth in global markets, these products are designated“Businesses Suitable for Globalization” where Hitachi believes it can rise above global
competition. Moving forward, Hitachi will strategically reinforce these businesses.
<Examples of Targeted Businesses>n Hard Disk Drive (HDD) Business
Hitachi will make capital investments totaling around 60 billion yen annually toenhance the world-class technological capabilities of Hitachi Global Storage
Technologies, Inc. with the aim of developing and commercializing competitive
products. The goal is to achieve positive operating income by fiscal 2004 and further
improve profitability thereafter. Hard disk drives constitute key components of
SAN/NAS Storage Solutions provided by Hitachi, and as such will also be applied infuture to New Era Lifeline Support Solutions. HDDs are also finding new applicationsin the broadband market, such as in digital consumer electronics. Hitachi Global
Storage Technologies is currently finalizing detailed business plans. Hitachi will
strategically reinforce this HDD business, in view of the strategic importance of thisproduct for the entire Group. Hitachi is targeting sales of 780 billion yen from the HDD
business in fiscal 2005, including sales from operations acquired from IBM. This sales
target is six times greater than sales for fiscal 2002.
- more --9-n Automotive Equipment BusinessIn response to the projected enactment of new automobile-related environmental
regulations, automotive devices such as electric-power trains, which are expected to
become widely used starting from 2006, represent a business domain promising
immense growth in the future. Hitachi has already made upfront investments in productdevelopment, with the goal of transforming this field into a future core business.
Hitachi’s efforts are not limited to the automotive components business. Group-wide
initiatives will be taken to create such value-added businesses as car information systemsolutions, which include wide-area telematics services. Hitachi is targeting sales of 370
billion yen in fiscal 2005 from the Automotive Equipment Business, which represents
30% increase compared to fiscal 2002 sales. This target includes the sales contributionof Unisia JECS Corporation (now Hitachi Unisia Automotive, Ltd.), which became awholly owned subsidiary of Hitachi in fiscal 2002 (Second-half sales included in fiscal
2002.) Hitachi is looking to spur further growth in anticipation of an expanding market
in fiscal 2006 and beyond.
n Semiconductor Production Equipment Business
Hitachi will implement strategic investments in product development alongside groupcompanies responsible for expanding this business. In addition, the Semiconductor
Production Equipment Steering Committee has been established to ensure that thisbusiness is conducted efficiently from a group-wide perspective. Hitachi aims for salesof 300 billion yen in fiscal 2005, which corresponds to a 70% increase compared tofiscal 2002.
n Battery Business
Hitachi is pressing ahead with the development of various batteries such as lithium-ion
batteries for automotive use and fuel cells for mobile devices. Hitachi is studying thefeasibility of applying these technologies as key devices for home network systems andbuilding facilities systems in the future. This will become a Group-wide project. These
new battery and fuel cell products are projected to generate sales of 6 billion yen in
fiscal 2005. Looking ahead to the emergence of new markets in fiscal 2006 andthereafter, Hitachi will endeavor to expand its business further.
4. Conclusion
Hitachi’s business environment is expected to grow increasingly challenging over the
next three years through fiscal 2005. In this climate, Hitachi will accelerate the creationof new businesses, drawing on Hitachi’s wealth of accumulated technologicalcapabilities, which is one of Hitachi greatest strengths. Another key measure is
structural reforms, which will entail exiting unprofitable businesses.
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Under the “i.e.HITACHI Plan II,” Hitachi will establish a highly profitable earnings
structure centered on its two primary business domains: “New Era Lifeline Support
Solutions,” which will further strengthen and fuse information system services andsocial infrastructure systems; and “Global Products Incorporating Advanced
Technology,” which combines highly competitive technologies with hardware andsoftware that incorporate knowledge from diverse disciplines.
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.

Cautionary Statement
This document contains forward-looking statements which reflect management's current views withrespect to certain future events and financial performance. Words such as "anticipate," "believe,""expect," "estimate," "intend," "plan," "project" and similar expressions which indicate future events andtrends identify forward-looking statements. Actual results may differ materially from those projected or
implied in the forward-looking statements and from historical trends. Further, certain forward-looking
statements are based upon assumptions of future events which may not prove to be accurate.
Factors that could cause actual results to differ materially from those projected or implied in any forwardlooking statements include, but are not limited to, rapid technological change, particularly in the
Information & Telecommunication Systems segment and Electronic Devices segment; uncertainty as to
Hitachi's ability to continue to develop products and to market products that incorporate new technology
on a timely and cost-effective basis and achieve market acceptance; fluctuations in product demand andindustry 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 the market for such products;
fluctuations in rates of exchange for the yen and other currencies in which Hitachi makes significant sales
or in which Hitachi's assets and liabilities are denominated, particularly between the yen and the U.S.
dollar; uncertainty as to Hitachi's access to liquidity or long-term financing, particularly in the context ofrestrictions on availability of credit prevailing in Japan; uncertainty as to Hitachi's ability to implement
measures to reduce the potential negative impact of fluctuations 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 ofimports; uncertainty as to Hitachi's access to, or protection for, certain intellectual property rights,
particularly those related to electronics and data processing technologies; Hitachi's dependence on
alliances with other corporations in designing or developing certain products; and the market prices of
equity securities in Japan, declines in which may result in write-downs of equity securities Hitachi holds.
These factors listed above are not exclusive and are in addition to other factors that are stated or indicatedelsewhere in this document, or in other materials published by the Company.

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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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