Hitachi, Ltd. (President: Etsuhiko Shoyama) today announced the establishment of a 
new software development company "Okinawa Hitachi Network Systems Co., Ltd." 
(tentative name) in Okinawa Prefecture on October 1. 

The new company will be established to cope with a target to cultivate information 
industries and a request for companies to come into Okinawa by the Liaison Council of 
Ministries and Agencies Related to Company Invitation Promotion into Free Trade 
Zone (a project team with a Parliamentary Vice-Minister for Okinawa Development 
serving as chairman), Okinawa Prefecture, and economic circles in Okinawa. The 
company is also a part of business expansion of the Hitachi group and will be developed 
in cooperation with the Government's Okinawa economic buildup policies. 

In spite of an adverse economic environment these days, the computer industry is 
progressing favorably both in Japan and overseas. In particular, software and service-
related companies are showing a large sales increase and are playing a role as a leader 
of the market. The software service ratio in the computer market represents more than 
50% and is considered to be increasing. 

Okinawa Prefecture is actively tackling the promotion of information systems and 
advanced technologies as seen by the "Okinawa Multimedia Special District Plan" and 
"Okinawa Multimedia Island Plan," both of which are information industry promotion 
plans sponsored by the Ministry of Posts and Telecommunications and Okinawa 
Prefecture, and "Information and Communication Industry Promotion Area Plan" which 
is based on the Government's Special Measures Law of Okinawa Promotion and 
Development. Okinawa Prefecture also has preferable conditions of location as an 
information hub base in Asia and is considered to be an appropriate area for information 
system and advanced technology development toward the 21st century because in 
Okinawa, ideal office and living environments and international-minded human 
resources can be easily obtained and operation costs are expected to be reduced because 
of various political measures for reducing communication costs. 

Under these conditions, Hitachi will establish a new company to conduct software 
development and design mainly for corporate information systems in Okinawa jointly 
with two companies in the Hitachi group. The new company will initially be started on 
a scale of approximately 30 employees, and by recruiting Okinawa-oriented 
experienced engineers and new graduates. In fiscal 2004, 5 years after the establishment, 
the company plans to enlarge its scale to approximately 200 employees.