Information (including product prices, product specifications, details of services, launch dates, inquiry information, and URLs) contained in this news release is current as of the date of the press release but is subject to change without notice. Please note that details may differ from those effective on the search date.

Hitachi Cable has determined that it is necessary to develop next-generation Gigabit Ethernet multiplex transmission device (GMX series) as an integral part of its lineup of strategic information network products. As a result, the Company has participated in the establishment of a joint venture company, CNMP Holdings (hereinafter CNMP), to conduct business operations in Japan, China, and the United States. In addition to entering the domestic RAN1 (Regional Area Network) market, the newly established company aims to enter the global telecommunications carrier market.

Recently, in the Japanese MAN2 (Metropolitan Area Network) market, demand for less costly network architectures compared with SONET3 and WDM4. In response, Hitachi Cable has contributed to the Wide-area Ethernet Networks of a large number of telecommunications carriers with the GMX it has developed and gigabit Ethernet switches. However, because the Company has not yet been able to enter the domestic RAN marketplace, which is constructed based on SONET and WDM technology, it has also been largely unable to enter overseas telecommunications carrier market.

As a means to enter the domestic RAN market and overseas RAN and MAN markets, Hitachi Cable must develop next-generation GMX that is compatible with existing protocols, such as gigabit Ethernet, SONET and fiber channeling, and yet requiring less than half of the cost of SONET and WDM devices. The key technologies of next-generation GMX are digital wrapper5 and all optical regional network6 technologies. In developing next-generation GMX technologies, Hitachi Cable established CNMP by gathering human resources from Japan, China, and the United States with a view to gaining a foothold in the domestic RAN market as well as overseas RAN and MAN markets.

CNMP will be a holding company responsible for the development of the business strategy of the CNMP Group, the formulation of plans for the development of transmission devices, and financial management of the other Group companies directly involved in business operations. These companies will focus their efforts on the development, manufacture, and marketing of such network-related products for carriers as next-generation GMX. These business operations companies include CNMP Networks (Beijing), Inc. (hereinafter CNMP Networks (Beijing)) which will be responsible for the manufacture and marketing of next-generation transmission devices for telecommunications carriers and software development; and CNMP Networks, Inc. (hereinafter CNMP Networks), which will be responsible for the design, development, and marketing of next-generation transmission devices for telecommunications carriers in the United States.

With the establishment of CNMP, Hitachi Cable aims to establish design and development bases overseas, secure dealership rights on a global scale for CNMP products (exclusive dealership rights in Japan), enter the domestic RAN market, and enter the global telecommunications carrier market.

(1) CNMP Business Model

(2) CNMP

1.	Name: CNMP Holdings, Inc.
2.	Representative: Chao Xiang Shi (CEO)
3.	Address: 1-6-1 Otemachi, Chiyoda-ku, Tokyo, Japan
4.	Capital: 312,400,000 yen (as of February 28, 2003)
5.	Ownership: Hitachi Cable: 100% (Future investment from Japanese, Chinese, and U.S. companies is expected.)
6.	Business Activities: Development of Group strategies, formulation of plans for the development of transmission devices, financial management of operations companies.
7.	Net sales: 3.0 billion yen (Fiscal 2006 target)
8.	Number of Employees: Undecided
9.	Established: December 5, 2002

(3) CNMP Networks

1.	Name: CNMP Networks, Inc.
2.	Representative Director: Chao Xiang Shi (CEO)
3.	Address: 1245 S. Winchester Blvd., Suite 208, San Jose, CA 95128, U.S.A.
4.	Capital: 0 yen (as of February 28, 2003)
5.	Business Activities: Design and development of next-generation transmission devices for telecommunications carriers
6.	Number of Employees: Approximately 10 (forecast for close of 2004)
7.	Established: November 8, 2002

(4) CNMP Networks (Beijing)

1.	Name: CNMP Networks (Beijing), Inc.
2.	Representative Director: Chao Xiang Shi (CEO)
3.	Address: Haidian District, Beijing, China
4.	Capital: 60 million yen (as of February 28, 2003)
5.	Ownership: CNMP Holdings, Inc.: 100%
6.	Business Activities: Manufacture, marketing, and software development of next-generation transmission devices for telecommunications carriers
7.	Number of Employees: Approximately 25 (forecast for close of 2004)
8.	Established: January 23, 2003

(5) Profile of Chao Xiang Shi

1988 Received MS from Department of Engineering, Beijing University of Posts and Telecommunications
1994 Received PhD in electronic engineering from Department of Engineering, University of Tokyo
Has conducted telecommunications-related research and development at Hitachi Cable, University of Michigan, Hitachi Telecom, Inc. (USA), Sprint Advanced Technology Labs, Zaffire, Inc. (USA), and Cirrus Logic, Inc. (USA).

Notes

RAN1:	Regional Area Network:	A network connecting cities (approximately 400-1,000 km)
MAN2:	Metropolitan Area Network:	An intra-city network (roughly 200 km or less)
SONET3:	Synchronous Optical NETwork:	High-speed digital protocol using fiber optic cable used in backbone lines linking ISPs
WDM4:	Wavelength Division Multiplexing:	Technology used in fiber optic telecommunication wherein multiple signals of different wavelengths are transmitted simultaneously, allowing multiplex use of the optical fiber
Digital Wrapper5:		A frame format making possible the unaltered transmission of data via optical network by wrapping the frame in an Optical Channel Header and FEC (Forward Error Correction) code, allowing real time error correction. This technology was standardized in ITU-T (International Telecommunication Union-Telecommunication Standardization Sector) G.709.
All Optical Regional Network6:		Devices stationed at cross-connection points on optical networks to convert optical signals into electrical signals and conduct routing control are highly complex and very costly. All Optical Regional Networks reduce network infrastructure costs by simplifying network structure, eliminating part of the process of the conversion from optical to electric signals and back.
Ethernet7 is a registered trademark of Fuji Xerox Co., Ltd.