HITACHI ESTABLISHES DEV CENTER FOR STORAGE MGMT SOFTWARE IN THROUGH ACQUISITION.

Hitachi, Ltd. (NYSE:HIT, TSE:6501) has announced that its Information and Telecommunications Systems Group has concluded a contract to acquire U.S. storage management software developer Comstock Systems Corporation for US$20 million. Following the acquisition, the company's name will be changed to Hitachi Storage Software Incorporated (tentative name) and converted into a U.S.-based Hitachi storage management software development center. Hitachi has positioned storage operations as a core business and is proactively developing operations in this area through such measures as acquisitions, alliances, and equity participation. This most recent acquisition represents a part of these efforts and will be leveraged in the proactive development of Hitachi's global storage solutions business.

On May 8, 2002, Hitachi announced the strengthening of its disk array systems and the full-fledged launching of its storage management software business. Coinciding with this announcement was the enactment of the "True North" Hitachi storage solution concept, which constitutes Hitachi's road map for uniting hardware and software to support the attainment of strategic data application, which is the ultimate objective of its customers. The acquisition of Comstock Systems is based on Hitachi's policy of positioning storage management software as one of its software business' priority products, and the primary purpose of the acquisition is to accelerate software development by establishing a storage management software development center in the United States. Moreover, the establishment of a software development center on the West Coast of the United States -- where storage and other computer technology related market information typically is generated -- will enable the organization of a development framework that is more fine-tuned to the worldwide storage management software market. Furthermore, since Hitachi Data Systems Corporation -- the core of Hitachi's overseas storage products' sales efforts -- will be directly involved in the management of the new company, Hitachi will be able to conduct development operations that are capable of swiftly reflecting the needs of its worldwide customers in product development.

Established in June 1999, Comstock Systems wields unsurpassed technologies in the field of NAS (Network Attached Storage) management and storage resource management that is also compatible with Hitachi's JP1 systems management software, which has won high level praise from the Japanese market. The addition of Comstock Systems into the Hitachi Group will enable greater business expansion in the storage solutions market by fusing Comstock's core performance and volume controlling technologies with Hitachi's prowess in storage technologies and its global business development potential.

Following the acquisition, Hitachi will convert Comstock Systems into a U.S.-based storage management software development center. The new company will retain Comstock's current management and staff and will incorporate the advanced methods of the U.S. IT corporations. Products developed by the new company will be marketed worldwide, not simply to the United States and Japan alone. Hitachi will strive to achieve annual net sales for the company of US$40 million in five years' time.