IBM AND HITACHI AGREE TO SPEED SERVER MANUFACTURING AND DEVELOPMENT AND FURTHER AIX 5L UNIX PLATFORM.

IBM and Hitachi have reached agreements which will help speed the development and manufacture of key products in each of the companies' server lines. The strategic relationship, which will leverage the manufacturing and development capabilities of the two companies, is designed to reduce expenses, improve time to market and broaden the range of products offered to customers.

IBM and Hitachi will cooperatively develop and manufacture selected servers, semiconductors and related components. These will include multi-chip ceramic modules (MCM) and memory cache components for use in IBM and Hitachi servers. The development activity will include future versions of IBM PowerPC processors. The two companies will also cooperatively develop selected chips which support Hitachi's VOS operating system. Hitachi plans to incorporate these chips into systems which it sells to its VOS server customers.

In addition, IBM and Hitachi will cooperatively design and manufacture selected servers that will be sold by both companies. The companies are also investigating additional opportunities for future PowerPC-based AIX 5L servers to expand the product offerings of both companies -- from low-end to high-end servers -- in mission-critical and other applications, such as high-performance computing.

Under the agreement, Hitachi will add PowerPC-based servers and embrace AIX 5L as one of its strategic platforms for its customers. These servers will be sold under the Hitachi brand. IBM and Hitachi will both work to provide future enhancements which will extend the leadership capabilities of AIX 5L-based servers.

"This relationship will help IBM speed the growth of the IBM eServer line, enabling us to deliver next-generation infrastructure for the accelerating demands of e-business," said William Zeitler, Senior Vice President and Group Executive, IBM Server Group.

"This strategic relationship with IBM will help Hitachi offer global-class platforms based on the technologies that both companies have developed for years and provide the customers with timely solutions incorporating such competitive platforms," said Toshihiko Odaka, Senior Vice President and Director, Senior Group Executive, Information & Telecommunication Systems Group, Hitachi, Ltd.

Hitachi, Ltd., headquartered in Tokyo, Japan, is one of the world's leading global electronics companies, with fiscal 1999 (ended March 31, 2000) consolidated sales of 8,001 billion yen ($75.5 billion). The company manufactures and markets a wide range of products, including computers, semiconductors, consumer products and power and industrial equipment.