Hitachi Launches OpNext, Inc. - Fiber Optic Components Unit

• Hitachi partners with Clarity Group to build upon Hitachi's world-class fiber optic division
• Clarity Group expects to invest up to $450 million in the new venture
• OpNext positioned to be a world-wide leader in the fast-growing optical components market through intensive R&D, focused sales initiatives and global expansion

As part of the transaction, Clarity Group, an equal partnership between Clarity Partners, a Los Angeles-based private equity firm, and Marubeni Group, a major Japanese-based trading house, will invest up to $450 million in OpNext. OpNext plans to use the investment to grow its R&D program, expand its world class manufacturing capability, enhance its worldwide sales and marketing department, and develop new products to meet the needs of its customers.

"To create this new company and to partner with the expertise and resources of Clarity Group allows us to expand globally and to enhance our position as a world leader in the fiber optic business," said Mr. Etsuhiko Shoyama, President of Hitachi, Ltd. "We are implementing our Medium-term Business Plan, the 'i.e.Hitachi Plan,' that we established last autumn. We are prioritizing management resources to achieve a high-profit structure and the fiber optic component business is one of our most important and core businesses. This partnership is the right step in the best direction."

Mr. Masaaki Hayashi, President and Chief Executive Officer of Hitachi's Telecommunication & Information Infrastructure Systems Group, will assume the title of Chairman of OpNext. Dr. David Lee, Managing General Partner of Clarity Partners and co-founder and former President and Chief Operating Officer of Global Crossing, Ltd, will assume the title of Co-Chairman. Dr. Minoru Maeda, former General Manager of Hitachi, Ltd., will join the senior management team of OpNext.

"Hitachi's talented engineers, advanced technology, and world-class R&D efforts combined with Clarity Group's vision and expertise makes for a dynamic future," said Mr. Hayashi. "This is a very exciting growing business for Hitachi and we are glad to have the right partners in such an important transaction."

Headquartered in the United States and with operating divisions based both in Tokyo and the U.S., OpNext will expand upon Hitachi's already well-established product line, which includes laser diode modules for OC-48/STM-16s and OC-192/STM-64s, transmitters and receivers for both OC-48/STM-16s and OC-192/STM-64s. Currently, Hitachi's fiber optic customers include most of the world's major telecommunications and data communications and industrial equipment manufacturers.

"Hitachi has always been a leader in fiber optics with a history of reliability and customer satisfaction," said Dr. Lee. "The creation of OpNext is the best way to expand the company's product line and to respond to the future demands of its customers in the ever-evolving marketplace. OpNext will be a global leader in the optical components industry."

Hitachi's fiber optic division is known for it's pioneering initiatives in fiber optic components. In 1988, Hitachi was the first to develop a commercialized semiconductor laser for undersea fiber cable transmission. In 1993, Hitachi led the path with its 2.5G optical transmission module and in 1995, with its 10G fiber transmission module.

The Parties expect the closing of the transaction to take place after regulatory approvals have been received.

OpNext, Inc.
OpNext Inc. (www.opnext.com), headquartered in the United States, is one of the world's leading designers and manufacturers of optical components for the data and telecommunications industries. OpNext's current products include state of the art laser diodes, transmitters and receivers for networks operating at speeds up to OC-192/STM-64.

OpNext Japan, Inc.
OpNext Japan, Inc., based in Yokohama City, Japan, is a wholly-owned subsidiary of OpNext, Inc. OpNext Japan designs and manufactures optical components which are currently part of Hitachi, Ltd.

Hitachi Ltd.
Hitachi, Ltd. (www.hitachi.co.jp), 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 (US$75.5 billion). Hitachi Ltd. manufactures and markets a wide range of products, including computers, semiconductors, consumer products and power and industrial equipment. Since 1980, Hitachi has led the industry in developing and mass-producing fiber optic Devices such as 2.5Gbps opto-electronic modules and 10Gbps opto-electronic modules.

Clarity Group
Clarity Partners
Clarity Partners (www.claritypartners.net), a private equity investment firm based in Los Angeles, California, invests in communications, emerging media and related technology companies. The firm's partners have extensive experience in successfully creating, investing in, managing and financing companies at all stages of development. Clarity Partners brings together investment professionals who were involved in three of the most successful transactions in the communications industry in the last decade, Global Crossing, WebTV Networks, Inc. and Univision Communications, Inc., as well as successful venture and growth capital investments such as OneTel Limited and Trillium Digital Systems, Inc.

Marubeni Group
Established in 1858, Marubeni Corporation (www.marubeni.co.jp), as a core company of Marubeni Group, is one of Japan's leading general trading houses, with operations that encompass domestic import, export and offshore trade. Activities range from the development of natural resources to the retailed marketing of finished products.