InPhase Technologies Announces Strategic Investment From Hitachi Maxell for Holographic Media Development.

Business & High-Tech Editors

LONGMONT, Colo. & TOKYO--(BUSINESS WIRE)--Dec. 4, 2002

Hitachi Maxell to Invest in Second Round of InPhase's Funding;

Firms Sign Joint Development Agreement to Further Innovation

in Holographic Media Manufacturing

InPhase Technologies, the leader in holographic data storage development, and Hitachi Maxell Ltd., the world's leading dedicated media manufacturer, today announced that Hitachi Maxell will make a strategic multi-million dollar investment toward InPhase's development of its patented Tapestry(TM) holographic media.

InPhase and Hitachi Maxell also announced that they have entered into a joint development agreement to further innovation in holographic media manufacturing.

The strategic investment from Hitachi Maxell will enable InPhase to continue its development of the initial Tapestry product, which is scheduled to reach the market in 2004. InPhase and Hitachi Maxell will conduct collaborative work at their respective research and development facilities in Longmont, Colorado and Tsukuba, Ibaraki, Japan.

"The collaboration between Hitachi Maxell and InPhase presents an opportunity for both companies to realize a significant achievement for the next generation of optical media, which will have profound impact on the way information is recorded and consumed," said Tomizo Taniguchi, President of Recording Media Business Group, Executive Director of Hitachi Maxell. "Hitachi Maxell has strategically invested in the future of holographic media, as represented by InPhase, and we look forward to a fruitful joint effort on both of our parties in ensuring a robust market for holographic media."

InPhase recently won R&D Magazine's 2002 R&D 100 Award for the development of its stable, high-performance holographic data storage media. The InPhase Tapestry media is based on a new class of materials, developed by InPhase scientists, that enable long-life, reliable, low-cost, high-capacity storage media for holographic recording.

"The alliance with Hitachi Maxell ensures a bright future for the holographic media industry, as well as a timely roll-out of our Tapestry products," said Nelson Diaz, president and CEO of InPhase Technologies. "InPhase's breakthroughs in holographic media have attracted the interest of such leading companies as Hitachi Maxell, and we welcome their investment in our company. Together, with Hitachi Maxell, we are poised to deliver the first commercial-grade holographic storage media and systems for recording, archiving and distributing data."

InPhase originally developed the breakthroughs that led to its current holographic data storage system, Tapestry, as part of the physical sciences research group at Bell Labs, in 1997. The InPhase polymer media fabricated by InPhase's ZeroWave(TM) process is dimensionally and thermally stable, has high photosensitivity, is of high optical quality, and can be provided to customers at a very competitive price. It has helped InPhase gain a significant leadership position in the emerging field of holographic storage, which represents the next generation in optical media storage, beyond current DVD standards.

The InPhase Tapestry system projects holograms into the media when the signal beam and reference beam intersect. Data is encoded onto the signal beam by a spatial light modulator (SLM), which translates electronic data in an optical array of 1.3 million bits. Data is read when the reference beam deflects off the hologram, which is then projected onto a detector. This process is conducted in parallel, enabling extremely fast transfer rates.

InPhase maintains a rich intellectual property portfolio related to its holographic media and systems technology. This includes ownership of or exclusive license to more than 40 Bell Labs patents. The company has either disclosed or filed for more than 30 new patents, and its portfolio is constantly growing.

Hitachi Maxell Ltd. (HIMX.F), based in Tokyo, Japan, is a leading full-line manufacturer of recording media products, including audiotape, videocassettes, computer tapes, professional broadcasting media, CD-R, Mini Discs, CD-ROM discs, DVD discs and floppy disks. In addition, the company manufactures and markets the primary batteries, lithium ion batteries, and a full line of accessories products. Consolidated sales were 1.8 billion dollars for fiscal year 2002.

InPhase Technologies is the leading developer of holographic data storage (HDS) recording media and systems. Based in Longmont, Colorado, InPhase was founded in 2000, and is comprised of some of the storage industry's leading executives, scientists, and engineers. The company holds more than 40 patents in the area of holographic storage, and has developed breakthrough technologies that enable the first commercial products for the HDS industry. Originally formed as a Lucent Technologies (NYSE: LU) venture, from within the physical sciences research division at Bell Labs, InPhase is backed by investors including New Ventures Partners LLC, Signal Lake, Madison Dearborn Partners, Hitachi Maxell, Ltd., Imation Corp (NYSE: IMN) and Newton Technology Partners. For more information on InPhase, please visit the company's Web site at www.inphase-tech.com.

EDITOR'S NOTE: For a color photograph of Nelson Diaz, InPhase president and CEO, or the InPhase Tapestry media, please contact Chris Pfaff at 201-218-0262 or [e-mail].