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News Release

September 29, 1997

Hitachi and Legend Group to Cooperate in the PC Business for Chinese Market

- The top PC vendor in China will jointly develop PC with Hitachi -

Hitachi, Ltd. and Legend Group Co.( President: Mr. Liu Chuan Zhi) today announced that the two companies have agreed to cooperate in the development, manufacture and marketing of PCs.

Based on the agreement, the two companies will jointly develop PCs as well as supply each other with PCs and related products. As a first step, the companies will together start the development of low-price desktop PCs.

Hitachi's strong point is its experience in the management of technical development, and its high technology in the area of key components. Legend Group Co.'s strong point is its PC design capability, high level of technical human resources and ability to localize the advanced technique and products. The companies will cooperate by utilizing each other's strong points and may extend cooperation to other areas including notebook type PCs and PC servers in the future.

Mr. Furumaya, Executive Managing Director of Hitachi, Ltd., said, "The reason why we have decided to enter a strategic partnership with Legend Group Co. is that Legend Group Co. is a leading company in China's PC market. They also have high potential in the technical area and a large customer base with a strong customer support network."

Mr. Zeng Mao Chao, Chairman of the board of Legend Group Co., said " With the increased pace technical progress, sharing among international corporations is indispensable. Moreover the development and manufacturing of PCs is a system engineering process involving various areas. No company can take advantage at every area. Hitachi, Ltd. is a famous company, and has unique, advanced technology in many areas. Through this cooperation, we will absorb Hitachi's technology such as in the area of liquid crystal display-type PCs and hope to announce such new concept PCs as soon as possible, using our human resources, high technology, PC design and localization capability, and products. It will also help Chinese customers to keep in touch with advanced technology without delay, and we will be able to enter the core area of computer manufacturing technology through this cooperation. The cooperation is also significant for our internationalization.

Legend, established by Chinese Academy of Sciences, is a top PC vendor in the Chinese market. The company is also promoting to strengthen development and manufacturing system to increase market share.

In 1993, Hitachi established Beijing Hitachi Huasun Information Systems Co., Ltd. with the Ministry of Electronics Industry of China and has been promoting system integration business for Chinese enterprises and its ATM(Automated Teller Machine) business.

Hitachi, Ltd., headquartered in Tokyo, Japan, is one of the world's leading global electronics companies, with fiscal 1996 (ending March 31, 1997) consolidated sales of 8,523 billion yen(68.7 billion dollars*). The company manufactures and markets a wide range of products, including computers, semiconductors, consumer products and power and industrial equipment. For more information on Hitachi, Ltd., please visit Hitachi's Web site at http://www.hitachi. co.jp.
* At an exchange rate of 124 yen to the dollar.

Legend Group Co., headquartered in Beijing, is China's leading PC company, with fiscal 1996 consolidated sales of 7.7 billion RMB (111 billion yen, 0.9 billion dollars). The company manufactures and markets PCs and PC mother boards and is also engaged in system integration services. Based on the most recent market survey, its sales of PCs ranks in the top ten Asian PC vendors, while Legend's mother board production is ranked among the top five in Asia. For further information, please access Legend's web page. (http://www.legend.com.cn)

Background

(Chinese PC market in 1996*)

1. Market Size
1996 - 2.1 million PCs sold.
1997 - Estimated 3 million PCs will be sold.
:
:
2000 - It is estimated that sales volume will reach 10 millions PCs.

2. Market Share**
Rank Company Sales Volume Share(%)
1. Legend Group Co. 207,000 9.9
2. IBM 160,000 7.6
3. COMPAQ 150,000 7.1
4. AST 145,000 6.9
5. Hewlett-Packard 120,000 5.8
6. DEC 75,000 3.7
7. Great Wall 64,000 3.2
Others 1,179,000 56.1
Total: 2,100,000 100

*Source: CICC(Center of International Cooperation for Computerization) market research report
** Source: Center of Computer and Microelectronics Industry Development Research, MEI


WRITTEN BY Secretary's Office
All Rights Reserved, Copyright (C) 1997, Hitachi, Ltd.