Hitachi 2004 Annual Report Download - page 14

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A Focus on Targeted Fields
Our basic stance is that we must make individual businesses stronger. In this regard, we have restructured the
Hitachi Group internally as well as entered alliances, formed joint ventures, and acquired and sold companies,
among other actions. These actions continue to this day.
One business we are focusing on is automotive systems, which is where we can leverage the wide-ranging
technologies of the Hitachi Group. In October 2004, Hitachi, Ltd. merged with equity-method affiliate TOKICO
LTD. and subsidiary Hitachi Unisia Automotive, Ltd. to strengthen the ability to develop products in the engine
management system and drive control system fields, as well as improve operating efficiency. In another move,
we teamed up with subsidiaries Shin-Kobe Electric Machinery Co., Ltd. and Hitachi Maxell, Ltd. to establish
Hitachi Vehicle Energy, Ltd. This new company was formed to develop and manufacture rechargeable lithium-
ion batteries for hybrid electric vehicles. Moreover, in May 2005, we announced that we would be strengthen-
ing ties with Clarion Co., Ltd. in the Car Information Systems (CIS) field. This will be an extension of joint
development projects with Clarion in the past.
We also reinforced businesses connected with flat-panel TVs, which are expected to see a surge in demand.
In April 2005, we made Fujitsu Hitachi Plasma Display Limited (FHP) a subsidiary by acquiring part of Fujitsu
Limited’s stake in this company, which manufactures and sells plasma display panels (PDPs). This move unified
business strategy in PDPs and plasma TVs as well as strengthened competitiveness in terms of price. In LCD
panels for TVs, operations commenced in January 2005 at IPS Alpha Technology, Ltd., a joint venture Hitachi
formed with Toshiba Corporation and Matsushita Electric Industrial Co., Ltd. IPS Alpha Technology is an
equity-method affiliate of Hitachi. Plans call for the start of mass production at this company between July and
September 2006.
In April 2004, Hitachi Metals, Ltd. merged its magnetic materials business with the same business of
Sumitomo Special Metals Co., Ltd. to form NEOMAX Co., Ltd., which became a subsidiary. This merger was
made to strengthen the magnetic materials business, where growth is forecast worldwide. Furthermore, in
October 2004, Hitachi sold its entire stake in printer subsidiary Hitachi Printing Solutions, Ltd. to Ricoh
Company, Ltd.
Past actions to reshape our portfolio are steadily producing results. Two semiconductor-related companies
established with other companies saw their operating results improve in fiscal 2004. One was equity-method
affiliate Renesas Technology Corp., a joint venture established in April 2003 with Mitsubishi Electric Corporation.
The other was Elpida Memory, Inc., an equity-method affiliate established with NEC Corporation in 1999.
Elpida Memory listed on the Tokyo Stock Exchange in November 2004.
Speeding Up Global Business Development
Bolstering its competitiveness overseas is another way Hitachi is driving growth. We are concentrating resources
on businesses and products where we can be one of the top three players in the global market, as we look to
accelerate the pace at which we develop our businesses globally.
In the “Global Products Incorporating Advanced Technology” domain, we have strong positions in HDDs,
optical disk drives, recording media and highly functional materials and components. And we are growing
plasma TVs, LCD projectors and other products. In the “New Era Lifeline Support Solutions” domain, our SAN/
NAS storage solutions business is expanding steadily. Moreover, in the Power & Industrial Systems segment,
sales of construction machinery and power systems are climbing, and we are working to capture more orders
for railway systems and other products.
Overseas revenues rose 10% year on year in fiscal 2004, lifting the share of overseas revenues to total
revenues by 2 points to 36%. Growth in sales to Asia was strong, particularly to China, where revenues jumped
25% from fiscal 2003.
10 Hitachi, Ltd. Annual Report 2005