Hitachi to Continue Flat-Panel TVs, HDDs, President Says

May 27, 2008
Naoshige Shimizu, Nikkei Electronics
Hitachi President Kazuo Furukawa explaining the company's corporate strategy
Hitachi President Kazuo Furukawa explaining the company's corporate strategy
[Click to enlarge image]

Hitachi Ltd will continue to position its flat-panel TV business, which is still in slump, and its HDD business, which began to slowly recover, as the company's core businesses, said President Kazuo Furukawa at the company's corporate strategy meeting May 26, 2008.

Reasons to continue the flat-panel TV business

The Digital Media & Consumer Products segment including the flat-panel TV business marked operating loss of ¥109.9 billion (US$1,062 million) in fiscal 2007, with the flat-panel TV business, in particular, strongly curtailing the profit. Furukawa cited three reasons why he still positions sluggish flat-panel TVs as the company's core business.

First, "Because the flat-panel TV market is growing on a global basis," he said. Hitachi intends to focus on flat-panel TV sales in BRICs and other emerging countries, in particular, according to Furukawa.

Second, "As flat-panel TV functions are changing," Furukawa said. He said he considers flat-panel TVs will be the entrance to the fusion of broadcasts and communications. Reflecting this view, Hitachi will start "Wooonet" networking service for TVs in June 2008, for example.

"Because flat-panel TVs require technology," he explained as the third reason. He forecast flat-panel TVs will become "wall-mounted TVs" and technology will determine each product power. Specifically, he mentioned the 35mm-thick LCD TV that Hitachi released in fiscal 2007 and the 35mm-thick plasma TV it announced at "2008 International CES" as examples (See related article).

"Hoping to raise HDDs to a robust business"

Gradually recovering from the sustainable operating loss, the HDD business has achieved operating income for two consecutive quarters in the October-December 2007 and January-March 2008 quarters.

Commenting on the HDD business, Furukawa stated, "We are considering raising it as a core business," and cited three reasons why.

The first reason was "Because HDDs are technology-oriented products." He said ambitiously, "We can surely win in the business" in the future using the perpendicular magnetic recording technology that Hitachi is focusing development effort on.

The second reason was "Because Hitachi is operating the storage business worldwide." He said he considers the HDD business is providing synergy to the flat-panel TV and IT businesses.

The last reason was "As HDDs are a completely global business among the various Hitachi businesses, considering that we research, develop and produce HDDs all over the world." Furukawa, who projects to "boost the ratio of overseas sales from the 42% in fiscal 2007 to 50% in 2010," seems to see the HDD business as an optimum model business for Hitachi.

Power systems, automotive equipment systems and green IT

Other than these businesses, Furukawa announced a policy to focus on the power systems, automotive equipment systems and information systems businesses as well.

As for the power systems business, Hitachi will strive to gain orders from nuclear power stations in the US. The company reached a basic agreement with General Electric Co on their strategic collaboration for the nuclear power business focusing on boiling water reactors (BWR) in 2007.

Hitachi intends to focus on Li-ion secondary batteries in the automotive equipment business, Furukawa said. The company will sell 100,000 units of automotive Li-ion secondary batteries to General Motors Corp every year from 2010.

In the information systems business, Hitachi will respond to the trends toward so-called "green IT," in which the power consumption of IT-related equipment and facilities is being cut in an effort to protect the environment, Furukawa said.

"To further cut power used at facilities such as data centers, it requires more than just IT technology. In this area, we can apply the overall strength of Hitachi, which also boasts excellent power supply and air conditioning technologies," Furukawa said proudly.