paper size=a4 letter (50p10x66p2) review of operations · paper size=a4 letter (50p10x66p2) review...

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Paper Size=A4 letter (50p10x66p2)

R E V I E W O F O P E R A T I O N S

C O N T E N T S

Information Systems 10Information Media Systems 12Electronics Components 14Power & Industrial Systems 16Consumer Products 18Materials / Services & Other 20Research and Development 22For a Better World 23

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Hitachi developed the world’s fastest disk drivewith a drive speed of 12,030 revolutions perminute. This drive is used in the new seriesof RAID subsystems.

EC is one of the key areas

on which Hitachi focuses its

leading-edge software and

hardware technologies. At a

Hitachi outsourcing center,

Internet banking trial projects

are being carried out with

more than 20 banks.

Hitachi will be helping the

banks to build and operate

commercial systems.

The spread of network computingtypified by the Internet and intranetsas well as new applications, such aselectronic commerce (EC) and datawarehousing, are generating increaseddemand for information systems and agrowing need to be able to seamlesslyintegrate different systems.

During the period under review,Hitachi’s mainframes continued to showa strong performance, with increasingdemand from abroad for higher pro-cessing performance. Disk array subsys-tems and other storage products alsorecorded growth.

Hitachi expanded its lineup of high-end mainframes offering up to a 25%improvement in processing performancecompared with existing models. In stor-age products, a new series of disk arraysubsystems using redundant array ofindependent disks (RAID) technologywas introduced that are capable ofbeing used with both mainframesand open systems.

In software and services, Hitachistrengthened its EC-related business.A new, comprehensive business mediaservice was started for intercorporateEC transactions based on businessplatforms featuring high scalability andthe ability to integrate business applica-tions required for various transactions.Hitachi also launched IC card solution

Info

rmat

ion

Syst

ems

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I n f o r m a t i o n S y s t e m s

services for the implementation of ICcard systems for EC applications togeth-er with an ultrathin, contactless IC card.A range of new distributed object middle-ware products and solution services wasreleased for smoothly linking corporate in-formation systems of different platforms.

In the area of content, Hitachi andToppan Printing Co., Ltd. started a de-pository and management service fordigitized images. In addition, HitachiDigital Heibonsha Limited, Publisherspublished a multimedia encyclopediaon CD-ROM that contains a wide rangeof information recorded in video, audio,and text format.

To introduce a common operatingsystem for emerging multi-applicationrequirements using IC cards, Hitachijoined the Multi-Application OperatingSystem Consortium headed by MondexInternational Limited.

Hitachi Software Engineering Co.,Ltd. recorded brisk sales of softwaresolutions for the Year 2000 problemand applications software for govern-mental organizations and financial insti-tutions. In computer systems, electronicconferencing systems and DNA sequenc-ing systems showed steady sales.

At Hitachi Information Systems, Ltd.,although sales from data processingservices showed little change from theprevious year, sales of software and

systems equipment increased. The com-pany strengthened its solution business,such as outsourcing and network ser-vices and software package business.

In telecommunications, sales declineddue primarily to weak investment bymajor carriers in Japan. Sales of exchangesystems and transmission systems declined.In the area of next-generation mobiletelephones, Hitachi began joint devel-opment of Wideband Code DivisionMultiple Access (W-CDMA) technologieswith Kokusai Denshin Denwa Co., Ltd.Also during the year, Hitachi beganshipment of a 10-gigabit-per-secondadvanced multiservice node OC-192synchronous optical network (SONET)transmission system to MCI Telecom-munications Corporation, of the UnitedStates. In addition, Hitachi and MCI suc-cessfully implemented the world’s firstfield trial of an optical cross connectsystem, which is expected to be a keysolution to handling increasingly heavytelecommunications traffic.

Hitachi also decided to enter the newbusiness of digital infrastructure usinga satellite for information providers insuch areas as education, medical treat-ment, and social benefits. The service iscapable of the simultaneous transmit-ting of video, audio, and other datathat can be recorded for replay on aPC or TV.

Together with Toppan Printing Co., Ltd., Hitachiis providing depository and management servicesfor digitized images using its latest computertechnology. Shown above is a scene from the12th century Illustrated Tale of Genji owned bythe Tokugawa Art Museum.

Hitachi launched a new IC card solution servicefor such applications as prepaid card systemsand credit card systems. The contactless IC cardprovided for the service is just 0.25mm thick.

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InformationMedia Systems

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In February 1998, Hitachi strength-ened its multimedia-related businessby combining its PC-related operationsand its digital products operations intoa single business group. By convergingkey technologies in this field, Hitachiaims to accelerate the delivery of highlycompetitive products and to enhance itsglobal marketing strategies to captureopportunities in rapidly expanding mar-kets. The new group is responsible forPCs as well as optical storage products,display products, and mobile products.

Sales of PCs and PC servers increased,supported by steady sales of desktopPCs equipped with LCD monitors. InSeptember 1997, Hitachi signed anagreement with Legend Group Co., theleading PC vendor in China, to jointlydevelop PCs and to supply each otherwith PCs and related products. As a firststep, in February 1998 Legend Groupintroduced a Legend-brand LCD desk-top PC.

Sales of display monitors recorded asignificant increase. Hitachi released 19-inch (18.0-inch viewable image size)multiscan color display monitors to meetthe demand for larger and clearer CRTmonitors for PCs and workstations. In

addition, Hitachi launched a 25-inchplasma display with a slim form factorand multiscan capabilities that offer high-resolution viewing of both video andcomputer data.

DVD is the image and informationstorage medium of choice for next-generation multimedia systems forvideo and audio equipment as wellas PCs. During the fiscal year, Hitachibegan mass production of DVD-ROMdrives. In March 1998, Hitachi introducedan external DVD-RAM drive unit for PCs.Hitachi also succeeded in developingthe basic technologies for DVD-RAMdiscs with a capacity of 4.7 gigabytes(GB) per side that is compatible withexisting 2.6GB DVD-RAM and 4.7GBDVD-ROM formats. The Hitachi DVDFormat Verifications Lab was establishedin December 1997 to provide verifica-tion services to the manufacturers ofDVD-RAM drives and discs.

Since its release in early 1997,Hitachi’s MPEG camera has beenwinning numerous awards aroundthe world as the industry’s most innova-tive digital camera for its ability to allowusers to easily manipulate video data ona PC. During the year, a new model of

Space-saving LCD desktop PCs, which are sellingwell, are showcases for Hitachi’s innovative elec-tronic components and assembly skills.

Versatile digital editing of full-motion video ismade easy by this MPEG camera. The latest modelhas added capabilities for making business pre-sentations.

I n f o r m a t i o n M e d i a S y s t e m s

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the camera was released that featuresenhanced business presentation capabil-ities that enable users to store Microsoft®

PowerPoint® presentation files on thecamera and display them on a monitor.Other new features include a video-capture function that converts standard-format analog video data to MPEG-1 data.

In Japan and the United States,Hitachi introduced new models of ahandheld PC, based on the Microsoft®

Windows® CE Version 2.0 operating sys-tem, with wider keyboards and colorscreens as well as built-in connectivitywith mobile phones to meet thedemand for instant and frequent remoteaccess to information. Also, Hitachi,together with Intel Corporation andother leading PC and consumer elec-tronics companies, made a joint propos-al to the Copy Protection TechnicalWorking Group, of the United States,on protecting digital video and audiocontent while providing a robust, fast,and transparent method of transmittingand receiving digital content among avariety of products, such as PCs, high-definition TVs, set-top boxes, digitalVCRs, and DVD players.

As a mobile communication tool, the new modelof Hitachi handheld PC has a color screen, quickstart-up keys, and a wide keyboard and can beeasily connected to mobile phones.

As a leading manufacturer

of DVD drives, Hitachi released

the world’s first double-speed

DVD-ROM drive. Hitachi is now

mass-producing DVD-ROM

drives for PC manufacturers.

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Hitachi released a new system-on-a-chip designASIC for image processing devices and data stor-age systems. Integrating a high-speed logic andhigh-density DRAM on the same chip provideshigher performance and lower power consump-tion in a smaller size.

Hitachi is developing a new

direct-write electron-beam

(EB) lithography system for

the volume fabrication

of advanced semiconductor

devices. Enhanced cell-

projection capacity allows the

new system to offer a major

boost in throughput. This

system is being developed

under the management of the

Association of Super-Advanced

Electronics Technologies in the

Ministry of International Trade

and Industry’s R&D Program,

which is supported by the New

Energy and Industrial

Technology Development

Organization.

In semiconductors, despite continueddemand for PCs excess supply depressedprices of 16-megabit and 64-megabitDRAMs. Semiconductor sales were downcompared to those of the previous fiscalyear, reflecting lower sales of memoryproducts, while microprocessors andmicrocontrollers were firm. In this severeenvironment, Hitachi is focusing on non-DRAM products, for which future growthis expected. During the year, Hitachi es-tablished a new organization to speedup the commercial implementation ofstrategically important system LSIs, whichfunction as systems on a single chip.

In memory products, production of16-megabit DRAMs was scaled back,while wafer fabrication of 64-megabitDRAMs was concentrated in two bases,in Japan and Singapore. During the year,Hitachi and Texas Instruments Incorpo-rated discontinued operations at theirjoint venture, TwinStar SemiconductorIncorporated, which was primarily en-gaged in the manufacture of 16-megabitDRAMs. Also, Hitachi continued tostreamline its U.S. and European man-ufacturing subsidiaries by shifting itsproduct focus from memories to non-DRAM products. In addition, Hitachienhanced the market responsivenessof its semiconductor operations in theUnited States by merging its sales and

Ele

ctro

nics

C

ompo

nent

s

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E l e c t r o n i c s C o m p o n e n t s

marketing divisions into a manufactur-ing subsidiary.

In non-DRAM product operations,Hitachi introduced the SH-4 RISC micro-processor for multimedia applications.To promote its SuperH RISC micro-processors, Hitachi concluded licensingor joint-development agreements witha number of companies, includingSTMicroelectronics, Seiko EpsonCorporation, and Sony Corporation.

Capital investment during the yearunder review was directed toward theconstruction of leading-edge facilitiescapable of superfine wafer processingtechnologies.

In display products, while sales ofcolor picture tubes for TVs were flat,sales of color display tubes (CDTs) forPCs were boosted, helped by newlyintroduced 19-inch CDTs. Increaseddemand for thin-film transistor (TFT)LCDs and fast response color super-twisted nematic (STN) LCDs for note-book PCs and desktop PC monitorspushed sales of LCDs up over the previ-ous year’s level. During the year underreview, Hitachi shifted its volume pro-duction from Japan to Singapore andMalaysia and increased production of17-inch CDTs, and started producing19-inch CDTs in Japan. In the LCD area,Hitachi began the production of TFT

LCDs at a new production line in Japanthat uses the industry’s largest glasssubstrates to enhance productivity.

Among reorganizational moves inthe United States, Hitachi decided toconsolidate sales and marketing andmanufacturing operations of displayproducts to strengthen electronicsdevice operations.

> OthersEB systems performed well, but over-

all sales of semiconductor manufactur-ing equipment were sluggish. Sales ofmedical equipment were firm, thanks tostrong sales of immunoassay analyzersystems. During the year, Hitachi estab-lished Hitachi Instrument (Suzhou) Ltd.for manufacturing, marketing, and ser-vicing automatic medical analyzers inChina. Also during the year, Hitachi andPerkin-Elmer Corporation, of the UnitedStates, formed a partnership to developand manufacture electrophoresis-basedgenetic analysis instrumentation.

Hitachi Medical Corporation postedincreased sales of permanent magnettype magnetic resonance imaging (MRI)systems and X-ray computed tomogra-phy (CT) equipment. However, intensecompetition resulted in a decline in salesof X-ray equipment.

Hitachi strengthened its SuperH RISC enginefamily by introducing the SH-4 microprocessorfor multimedia products. This microprocessorfeatures a 360 million-instructions-per-second(MIPS) performance at 200 MHz and supportsthe Microsoft® Windows® CE operating system.

Hitachi is expanding production of projectiontubes at Hitachi Electronic Devices (USA), Inc.to address increased demand for large-screenprojection TVs in the U.S. market.

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Power &16


> Power SystemsDemand for electric power grew only

slightly during fiscal 1997 due to thesluggish Japanese economy. Capitalinvestment of Japanese electric powercompanies declined considerably. InHitachi’s nuclear power operations, theadvanced boiling water reactor (ABWR)No. 7 unit of the Kashiwazaki KariwaNuclear Power Station of the TokyoElectric Power Company, Incorporated(TEPCO) was completed in July 1997.Notwithstanding this important delivery,major shipments were completed in theprevious year, causing a sharp fall in salesof nuclear power systems. In its thermalpower operations, Hitachi delivered acoal-fired plant for Tohoku Electric PowerCompany, Incorporated’s HaramachiThermal Power Plant and a combined-cycle plant to Kyushu Electric PowerCompany, Incorporated’s Shin-Oitafacility.

Regarding operations abroad,Hitachi’s major shipments includedgas-insulated switchgear for P.T. PaitonEnergy Company in Indonesia and sixpump turbines for the Andra PradeshState Electricity Board in India. Hitachi isfocusing its efforts on developing highlyefficient power supply systems thatreduce greenhouse gases and otherwiseminimize environmental impact. In addi-tion, Hitachi is expanding its operationswith the establishment of a nuclearpower equipment joint venture,Dalian Hitachi Baoyuan Machinery &Equipment Co., Ltd., in China to

respond to that growing market. Basesabroad also serve as important procure-ment sites for Hitachi in Japan. Otherkey initiatives for the power business in-clude winning new customers amongthe independent power producers bothin Japan and other countries. Hitachi issupporting power companies in theirefforts to make their plants leaner andmore efficient.

> Industrial SystemsCutbacks in public-sector investment

and sluggish private-sector investmentin plant and equipment during fiscal1997 led to a deterioration in demandfor industrial systems. Furthermore,Hitachi experienced the impact of a sud-den retreat in infrastructure investmentin Southeast Asia. These factors com-bined to create a harsh operating envi-ronment for Hitachi’s industrial systemsbusiness. During the fiscal year, Hitachishipped a tunnel ventilation system forthe Trans-Tokyo Bay Highway Corpora-tion and a new-model Shinkansen bullettrain for West Japan Railway Company.

Hitachi is striving to expand its busi-ness in the fields of environmental prod-ucts, intelligent transport systems, andwelfare-related equipment. Key devel-opments in Hitachi’s environmentalproducts during fiscal 1997 included apower generation system that runs onoil reclaimed from plastic refuse and thestart of pilot plant construction of a kiln-type waste thermolysis system. Amongoperations abroad, in December 1997

Hitachi delivered the revolutionary No. 7 ABWRunit of TEPCO’s Kashiwazaki Kariwa NuclearPower Station.

Hitachi built the tunnel ventilation system for theTokyo Wan Aqua-Line. Opened in December 1997,the 15-kilometer expressway is one-third bridgeand two-thirds tunnel.

P o w e r & I n d u s t r i a l S y s t e m s

IndustrialSystems

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Hitachi established Hitachi Airconditioning& Refrigerating Products (Guangzhou)Co., Ltd., a joint venture for the manu-facture and sale of chiller units in China.Also, Hitachi decided to establish ZAOHitachi-Svetlana Power Electronics inRussia for the manufacture and market-ing of insulated gate bipolar transistorsfor use in rolling stock.

> OthersAlthough automobile demand in the

United States was firm, sales of automo-tive products did not expand because ofthe downturn in automobile demand inJapan. In line with tighter environmentalregulations on automobiles worldwide,Hitachi is focusing its product develop-ment on car electronics that improvefuel efficiency and clean exhaust emis-sions and launched its direct gasolineinjection systems.

Hitachi Construction Machinery Co.,Ltd. experienced the impact of reduc-tions in public works investments inJapan. Abroad, construction demand inNorth America was robust, and Hitachiexpanded local production to meet ris-ing demand. Meanwhile, in Asia busi-ness deteriorated, due to the economiccrisis in Southeast Asia.

Hitachi Plant Engineering & Construc-tion Co., Ltd. suffered a declining per-formance, due to major reductions incapital investment, which precipitated asignificant drop in sales for constructionof electric power plants in Japan.

Hitachi Automotive Products (USA), Inc. producesairflow sensors that help realize highly efficientautomotive engines for the U.S. market.

Hitachi is expanding its

environment-related business.

Designed by Hitachi, this fully

integrated processing and

recycling system for refrigera-

tors, air conditioners, washing

machines, and TVs is operated

by Japan’s Association for

Electric Home Appliances.

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Hitachi’s new series of home vacuum cleaners hasa nozzle that rotates clockwise and counterclock-wise to accommodate the user’s hand grip motion,permitting the user to easily clean even roomcorners and narrow openings.

The Hitachi All-Format Decoder

(AFD) algorithm was devel-

oped by Hitachi’s Digital

Media Systems Laboratory in

Princeton, New Jersey. The

laboratory’s mission is to

develop digital signal process-

ing technology for the U.S.

advanced TV market. Hitachi

anticipates that the AFD

algorithm will also be used in

future microprocessors to

allow for the viewing of

digital TV broadcasts on PCs.

During the period under review, theJapanese market for consumer productscontinued to be sluggish. A nationalconsumption tax rate increase imple-mented in April 1997, the halting of taxreduction measures, and uncertaintyregarding Japan’s financial marketscombined to dampen consumer spend-ing in Japan. This situation was com-pounded by a sharp drop in sales ofroom air conditioners due to unseason-able weather in Japan. Conditions weretight in markets abroad as well, reflect-ing a deceleration in the Southeast Asianeconomies prompted by the currencycrisis in that region.

Regarding operations abroad duringthe year, in the United States Hitachientered into a distribution agreementwith Appliance Corporation of Americafor food steamers, rice cookers, andother small appliances. Moreover,Hitachi realigned channels and stream-lined operations in its conventionalconsumer products business andmultimedia-related business in NorthAmerica. In Southeast Asia, Hitachi israising exports to other regions to coun-teract slow local demand in Thailand,Malaysia, and Indonesia and to takeadvantage of weak currencies in thosecountries. Hitachi is also raising localprocurement in Southeast Asia toimprove its cost-competitiveness.

> Home AppliancesIn Japan, a higher national consump-

tion tax rate and other factors adversely

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C o n s u m e r P r o d u c t s

affected consumer confidence, whichlowered sales of refrigerators and otherproducts. Also, the unseasonableweather in Japan caused sales of roomair conditioners to slump. In marketsabroad, turmoil in Southeast Asianeconomies and the combination of anunseasonably cool summer and intensi-fying competition in China precipitatedweak sales of room air conditioners.

Effective October 1997, Hitachi andGeneral Electric Company consolidatedmarketing and sales of lighting productsinto their joint venture in Japan, HitachiGE Lighting, Ltd. In spring 1998, Hitachi,along with its long-standing Indianpartner Amtrex Appliances Limited,decided to enter the room air condi-tioner market in India.

> Consumer ElectronicsTVs, VCRs, and other consumer elec-

tronics products were negatively affect-ed by economic sluggishness in Japanand Southeast Asia and tough competi-tion. A key trend in TVs in the UnitedStates, Europe, and Japan has beenthe advent of digital broadcasting. InDecember 1997, Hitachi and ThomsonConsumer Electronics, Inc. agreed tojointly develop high-definition television(HDTV) sets for the introduction ofHDTV digital terrestrial broadcastingin the United States in fall 1998.

Meanwhile, Hitachi developed an AFDalgorithm that provides the means todecode and display all 18 digital formatsof the U.S. Advanced Television Systems

Committee Standard at a complexity andcost comparable to standard-definitionTV-format-only decoders. Hitachi decid-ed to license this technology to IntelCorporation.

In Japan, Hitachi has been launchinga succession of sets equipped withreceivers for digital satellite broadcasts.

During the year, Hitachi launched inJapan wide-screen TVs equipped withits proprietary Progressive LSI device torespond to customers’ needs for higherpicture quality.

Furthermore, Hitachi began commer-cial production of DVD players at HitachiTechnology (Taiwan) Ltd. DVD playersprovide extremely clear pictures to gowith the format’s outstanding soundquality.

> OtherHitachi Maxell, Ltd. enjoyed growing

sales of mini discs in Europe as well as inJapan. However, sales of videotapes andaudiotapes were weak during the year.Sales of computer tapes for large-capacitybackups of computer systems were favor-able. Sales of lithium ion rechargeablebatteries also were healthy, reflectingthe rising demand from manufacturers ofmobile phones and portable informationsystems. During the year, Hitachi Maxellestablished its first overseas R&D basein the United States. The new facilitywill also conduct research to developrecording media jointly with U.S. enter-prises, which are advanced in the field.

This wide-screen TV for the Japanese market isequipped with a Progressive LSI device that pro-vides double the resolution of conventional TVsand creates a high quality picture.

Hitachi Maxell developed a lithium ion recharge-able battery as thin as a credit card by applyingits proprietary gel polymer electrolyte technology.

Materials/

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> MaterialsAt Hitachi Chemical Co., Ltd., sales

of epoxy molding compounds for semi-conductors rose during the year underreview. In addition, copper clad lami-nates for multilayer boards for mobileequipment and photosensitive dry filmsfor printed wiring boards generatedstrong sales. Meanwhile, a downturnin private-home construction in Japanadversely affected sales of housing equip-ment and environmental facilities. Salesof resin molded products were down,due to the downturn of automobileand room air conditioner production. InAugust 1997, Hitachi Chemical formeda joint venture in the United States withE. I. du Pont de Nemours and Company,of the United States. The joint venturecompany markets polyimide materialsin global markets.

Hitachi Metals, Ltd. posted healthyresults in rare-earth magnets for hard diskdrives and CD pickups, semiconductorsealants, information-related compo-nents for mobile telephones, and shad-owmask materials used in PC monitorsand TVs. Among automotive materials,sales of ductile cast-iron parts declinedin tandem with a downturn in trucksales in Japan and elsewhere in Asia.Aluminum parts also slipped, due tosluggishness in the Japanese automobilemarket. Turning to high quality specialtysteel, die steels and cutting tools sold

well, buoyed by strong demand fordies from automobile and electronicequipment manufacturers. HitachiMetals’s business abroad was adverselyaffected by the currency crisis in South-east Asian markets. The company isfocusing its activities on new businessand products related with informationtechnologies as well as expanding pro-duction of giant magneto-resistive (GMR)heads for hard disk drives.

At Hitachi Cable, Ltd., sales of wiresand cables were brisk, reflecting growthin power cables, optical fiber cables, andaluminum wire. In electronic compo-nents operations, strong sales of com-pound semiconductors compensatedfor a decline in IC leadframe prices.

In cable operations, Hitachi wasactive in market development abroad.In September 1997, Hitachi establishedHitachi Cable Philippines, Inc. to pro-duce automotive wire and electronicwire and cable as well as leadframesfor power ICs. Hitachi Cable has enjoyedpositive results and continues to captureopportunities in such new businessareas as microball grid array tape, whichis a semiconductor packaging materialsuitable for mobile equipment.

> Services & OtherAt Nissei Sangyo Co., Ltd., sales

of semiconductor manufacturingequipment dropped, due to the slump

Manufactured by Hitachi Cable, these epitaxialwafers are designed for such high frequencydevices as mobile phones, which are expectedto enjoy further growth.

This bathroom unit manufactured by HitachiChemical has an entrance that is designed forbetter convenience, with no steps up or down.

M a t e r i a l s / S e r v i c e s & O t h e r

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494

504

400

Three-Year R&D Expenditures (billions of yen)

’96

’97

’98

in the semiconductor industry, especiallyin Korea. However, sales of color displaytubes (CDTs), monitors, and automaticimmunoassay analyzers were brisk, andthese sales supported generally favor-able results for Nissei Sangyo.

Hitachi’s major general tradingcompanies for markets outside Japan,Hitachi America, Ltd., Hitachi Asia Ltd.,and Hitachi Europe Ltd. returned mixedresults for the year. PC peripherals andrelated products, such as CD-ROMs,DVD-ROMs, and CDTs, sold well.

Hitachi Transport System, Ltd. en-deavored to deliver optimal distributionsystems for customer needs. The com-pany also completed construction ofthree distribution centers in Japan andestablished a subsidiary in the UnitedKingdom to bolster its distribution infra-structure. Such efforts were rewardedwith favorable results.

Hitachi Credit Corporation launched awide range of novel financial services toaddress the new corporate needs arisingfrom financial deregulation in Japan. Inits mainstay business, the volume oflease contracts for information systemswas unchanged from the previous term,but loans for automobiles as well asagriculture and aquaculture equipmentgrew steadily. As a result, the volume ofHitachi Credit’s business transactionsreached an all-time high.

In August 1997, Tokyo Monorail Co., Ltd., ownedby Hitachi Transport System, introduced a newmonorail and thus improved its capacity, whilesaving energy and enhancing service.

Hitachi Metals plans to expand

GMR head production. GMR

heads permit high-density

mounting and are designed

for next-generation hard

disk drives.

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Expenditures on R&D during fiscal1997 amounted to ¥510,878 million($3,870 million), an increase of 1%compared with the preceding year’stotal and representing 6.1% of totalsales. Over 60% of this expenditurewas allocated to the InformationSystems & Electronics sector.

Hitachi’s R&D has been focusing onimproving the productivity of researchand strategically prioritizing develop-ment projects while at the same timeaggressively uncovering promising newbusiness areas. As part of such activities,business units set project themes andhave autonomy to drive them from R&Dto manufacturing and marketing underthe Strategic Business Projects system.Hitachi is also fortifying its R&D capabili-ties outside Japan in line with the glob-alization of its business. In the UnitedStates, for example, R&D of multimedia,automotive parts, and semiconductors islinked directly to their respective manu-facturing and marketing operations. InEurope, Hitachi is cooperating withindustry, academia, and government forresearch in microelectronics, informationscience, and industrial design as well asbeginning research in the UnitedKingdom on telecommunications tech-nologies. In another move, in February1998 the System LSI DevelopmentCenter was established in Japanto strengthen the development ofsystem LSIs.

> Noninvasive CardiacExamination ProcedureHitachi and the University of Tsukuba

succeeded in capturing the world’s first

images of cardiac ischemia with a non-invasive procedure that does not useinjections or drugs. The team usedsuperconducting quantum interferencedevices (SQUIDs) to measure the mag-netic fields generated by the heart toproduce images of the heart’s electricalcurrent distribution. The SQUID technol-ogy used in this system was developedby the Superconducting SensorLaboratory, one of the founders ofthe Japan Key Technology Center.

> First LSI with Single-ElectronMemoryHitachi has achieved the successful

operation of a prototype for the first LSIwith a single-electron memory. Hitachi’snew 128-megabit single-electron mem-ory has two million times the integrationof its 64-bit predecessor developed in1996, equaling the memory capacityof the latest memories.

> Light-Based Procedurefor Detecting EpilepsyWorking in collaboration with the

Tokyo Metropolitan Police Hospital,Hitachi has developed the first light-based procedure for identifying theepileptic focus in the brain. This methoduses optical topography, in which a sub-ject’s head is irradiated with very weaknear-infrared light to generate two-dimensional images that are used todetect abnormal brain activity duringseizures.

Hitachi’s new 128-megabit single-electronmemory allows for radically higher integrationthan existing technologies and opens the doorto terabit-class memories.

Images of the electrical current distribution inthe heart can be obtained quickly and easilywith this diagnosis system, which has an ultra-high sensitivity magneto-sensor.

R e s e a r c h a n d D e v e l o p m e n t

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Hitachi is involved in a wide range ofphilanthropic work around the globe.Seven Hitachi-endowed foundations aresupporting education, research in sci-ence and technology, environmentalprotection, international exchange, andother worthy causes. Moreover, a cor-porate-wide goal has been to operatein harmony with the environment andlocal communities worldwide.

> The EnvironmentIn July 1992, Hitachi implemented

its Environment Action Plan and hasbeen aggressively reducing the volumeof industrial waste it generates and recy-cling resources. In fiscal 1997, industrialwaste produced was 33% of the 1991level. In January 1998, Hitachi formulat-ed a new Action Plan that aims to fur-ther reduce industrial waste. Furthermore,Hitachi remains on course to meet itsgoals of reducing energy consumption30% per unit sale from 1990 levels by2000.

Hitachi has adopted lead-free solderin its consumer electronics and indus-trial machinery as part of its dedicationto eliminating the use of environmental-ly hazardous materials. Hitachi is alsochanneling its R&D resources towardenvironmental issues, including by develop-ing high-speed systems to remove algaefrom lakes and reservoirs using super-conductivity and a diesel engine genera-tor system which uses fuel oil recoveredfrom refuse plastic materials.

> Welfare Equipment Hitachi is active in increasing the

participation in society for all people. InOctober 1997, Hitachi introduced equip-ment that helps amyotrophic lateralsclerosis (ALS) patients to communicate.ALS is a difficult-to-treat disease thatcauses muscles to deteriorate withoutany effect on sensory functions. Hitachi’sequipment allows ALS sufferers to oper-ate PCs and thus communicate with aminimum of physical strength. Thesystem was developed in cooperationwith the Kitasato University East Hospitaland has been supported by a grant fromThe Association For Technical Aids, anorganization affiliated with Japan’sMinistry of Health and Welfare.

> Hitachi Fellowship ProgramSince 1997, administrated in partner-

ship with the U.S. Council on ForeignRelations, Hitachi has been sponsoringthe International Affairs Fellowship inJapan. The program enables a selectgroup of outstanding young Americansto expand their intellectual and profes-sional horizons through an extendedperiod of research or related profes-sional activities in Japan.

> Second Hitachi Young LeadersInitiative At the second Hitachi Young Leaders

Initiative held in Manila in November1997, 24 university students selectedfrom six Asian countries met with leadersof government, academia, and businessto exchange ideas and discuss Asia’sgrowing role in the global community.

The Volunteer Center of United Way’s HumanRace is a fund-raising event. The event is awalkathon and run. Hitachi helps sponsor theevent, and employees and their families partic-ipate to raise money for the nonprofit organiza-tion or school of their choice.

The Hitachi Symphony Orchestra, which compris-es Hitachi employees and their families in Japan,performed in Singapore with a Singaporeanpianist and donated all the proceeds to theSingapore School for the Visually Handicapped.

F o r a B e t t e r W o r l d

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Chairman and Representative Katsushige MitaDirector

President and Representative Tsutomu KanaiDirector

Executive Vice-Presidents and Hiroshi KuwaharaRepresentative Directors Shiro Kawate

Tadahiko ShinoharaKunio HamadaEtsuhiko Shoyama

Senior Executive Managing Yasutsugu TakedaDirectors Yoshiki Yagi

Shigemichi MatsukaYoshiro Kuwata

Executive Managing Tetsuo KobayashiDirectors Yuushi Samuro

Kazuo KumagaiTakashi KawamuraKenichi FurumayaTadashi Ishibashi

Board Directors Tsugio MakimotoKyohei KasabaKazuo SatoKaichi MurataJushi IdeKatsukuni HisanoHiroshi InomataKotaro MuneokaTakao KatoKosei NomiyaTakao MatsuiMasaaki HayashiToshihiko Odaka

Corporate Auditors Nobuji KamachiIwao MatsuokaTakashi KashiwagiKazuo MoritaYoshio OkawaraShinji Tamagawa

B O A R D O F D I R E C T O R S A N D C O R P O R A T E A U D I T O R S

(As of June 26, 1998)

Shigemichi Matsuka

Yoshiro Kuwata

Etsuhiko Shoyama

Tadahiko Shinohara

Kunio Hamada

Hiroshi Kuwahara Shiro Kawate

Katsushige Mita Tsutomu Kanai

Yasutsugu Takeda Yoshiki Yagi

paper size=a4 letter (50p10x66p2) review of operations · paper size=a4 letter (50p10x66p2) review...

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