r&d for a high-profit growth company - hitachiplatform technology for a safe, secure &...

1©2005 Hitachi, Ltd. All rights reserved.

Dr. Michiharu NakamuraExecutive Vice President and Executive OfficerHead, Research & Development GroupHitachi, Ltd.

R&D for a high-profit growth company

Thursday, 7th April 2005


FY 2004 Achievements

1

FY 2005 Harvest

2

R&D with 2010 in sight

3

4

Introduction

©2005 Hitachi, Ltd. All rights reserved.

Contents


-1.

Based on technology and collaborative creativity, direct the group’s R&D efforts towards satisfying customers in ways that contribute to the prosperity and safety of society.

Develop world-leading technologies that drive further growth of the Hitachi Group.

Create paradigm shifts in industrial technology with original ideas and an accurate understanding of social trends.

11 Hitachi Group R&D Philosophy


-2.11 Hitachi Group R&D Scheme

Business Strategy Roadmap

Hitachi Group Platform ResearchTechnology Platforms Across the 　 Hitachi Group

Hitachi Group 　Frontier Research

Sponsored Research Advanced Sponsored Research

2006Management

strategy

Business / technology

strategy

Creation of next-generation core

businesses / new businesses

Group R&D

Year

Long-term Technology Development Plan

Expansion / incubation of“Inspire A” businesses

20142004 2009“i.e.HITACHI PlanⅡ”

Paradigm-shifting Technology

Core Technology 2010Harvest

HHaarrvveesstt

FY 2004 Achievements FY 2005 Harvest



1

FY 2005 Harvest

2


3

4

Introduction


Contents


-1.22Presented at 2004/4/7 Information Meeting

Promoting R&D ThroughGroup Collaborative Creativity

“Inspire A” BusinessesPromoting Technological

DevelopmentRaising R&D Efficiency

Hitachi Group CTO* MeetingHitachi Group Frontier / PlatformResearchTechnology platforms across the Hitachi Group

Foster and strengthen core technologiesConcentration of R&D resources

Synchronize with management strategyR&D collaboration with outside parties

“Engine” for Creating and Strengthening Businesses

*CTO : Chief Technology Officer

FY2004 R&D Approach


・ Nanotechnology & Materials・ Li Batteries・ Fuel cells

Key Technologies, & Devices**

Automotive・ CIS・ Electric

Power Train・ Cruise Control*

StorageService & Solutions

・ Outsourcing・ E-government・ Network Solutions・ RFID Solutions・ Broadband Access

Equipment*・ System Logistics

(3PL)*

Production & Testing Equipment

・ Semiconductor & Liquid Crystal DisplayManufacturing Equip.

・ Storage Solutions・ HDDs・ Ubiquitous HDD

CIS : Car Information Systems

PDP: Plasma Display Panels3PL : Third Party Logistics

BusinessBusinessExpansionExpansion

Areas toAreas toFosterFoster

AcrossAcrossDivisionsDivisions

IndividualIndividualEffortEffort

Taking advantage of HitachiGroup

Propelled by individual business groups

<8 <8 Areas of Business>Areas of Business>

Aiming for No. 1 for nextgeneration backbone business

Potential new backbone business areas

Medical & Biotechnology

・ Medical Diagnostic Systems

・ Medical Support Systems

・ Proton Beam CancerTherapy Systems

Consumer・Degital Media・PDPs*・TFT LCDs for TV*

Social Infrastructure

Systems・ Urban renewal・ Transportation Systems・ Coal Thermal Power

Systems*

* Newly added theme

-2.　22 Promoting “Inspire A” Businesses

** Key Technologies & Devices has merged with Batteries


-3.22 Examples of “Inspire A”Business Achievements (1)

SANRISE USPInformation & Telecommunication

Systems Group

HDD for Portable Music TerminalHitachi Global Storage Technologies

Established Hitachi Vehicle EnergyAutomotive Systems Group,

Shin-Kobe Electric Machinery Co., Ltd.,Hitachi Maxell, Ltd.

Established ALAXALA NetworksALAXALA Networks Corporation,Information & Telecommunication

Systems Group

Storage Solution HDD : 1 inch　Microdrive Communications Network

Wooo Li Battery

55” PDP TV, DVD Recorder with 400GB HDDUbiquitous Platform Systems Group, Hitachi GST


22 -4.Examples of “Inspire A”

Business Achievements (2)

Fuel cells, RFID Solutions, Ubiquitous HDD: Information Terminal “Nature Viewer” on display at Aichi World Expo

Information & Telecommunication Systems Group, Ubiquitous Platform Systems Group, Hitachi GST

　Sankyo Co., Ltd. contractInformation & Telecommunication

Systems Group

Magnetic Cardiograph (Received Ten Best New Products Award)

Hitachi High-Technologies Corporation

Preferred manufacturer for CTRL domestic service trains in the UK

Power Systems Group

AS-IPS2 LCDHitachi Displays, Ltd.

Transport Systems TFT LCD for TVs Outsourcing

Medical Diagnostics


-5.22Strengthen competitiveness by integrating the Li-ion battery business in one company

Hitachi Vehicle Energy, Ltd.Dec. 2004: Pilot line completed

ResourcesResources

Batteries / Components / Control Systems/ Highly Functional Materials

Shin-Kobe Electric Machinery Co., Ltd.

Hitachi, Ltd.

Hitachi Maxell, Ltd. TechnologyTechnology

Hitachi, Ltd. R&D Group(Materials Research Laboratory, etc.)

Hitachi Group(Hitachi Chemical Co.,Ltd. Hitachi Metals, Ltd.,etc.)

Technology

NiNi--MHMH (’01)(’03)

00 1001000

2,000

4,000

3,000

5050

1,000

22ndnd GenerationGeneration

•• Spinel Manganese Spinel Manganese Positive PolePositive Pole

•• Carbon Negative PoleCarbon Negative Pole

•• New Manganese New Manganese Positive PolePositive Pole

•• New ElectrolyteNew Electrolyte

11stst GenerationGeneration

LiLi--ionion

Energy Density （Wh/kg）

Out

put D

ensi

ty (W

/kg) Expand

applicationsExpand

applications

Portable：Hybrid Vehicles / TrucksFuel-cell Hybrid VehiclesHybrid Diesel

Establishment of Hitachi Vehicle Energy, Ltd.

Fixed：Back-up Power Source(Cellular Phone Base Stations, Buildings, etc.)


-6.22

Successful Observation of the Spin-Hall Effect(Magnetic properties induced by passing electric current

through a semiconductor)

Mirror Display 360°3D Display360°3D Display

Silhouette Counter

Robotics

Human Interaction

Spintronics

Presented to the Prime Minister & Cabinet (National IT Strategy Council)

Sept. 2004

Hitachi Cambridge Laboratory Research Achievement(Joint research with Univ. of Texas, etc.)

Nov. 2004

March 2005

EMIEW*: An interactive robot responding to dialogueto support daily life

Agile collision avoidance

Natural hand movement

High-speed mobility

Interactive communication

2005 Aichi World Expo Exhibit(June 2005 - )

Feb. 2005

* Excellent Mobility and Interactive Existence as Workmate

ＴＦＴ

Sheet Display

Organic TFT- driven Color LCD

June 2004

World’s highest definition achieved

(Collaboration with the University of Tsukuba; NEDO supported project)

Examples of Hitachi Group Frontier Research Achievements

Nov. 2004

(Collaboration with the National Institute of Advanced IndustrialScience and Technology (AIST); a NEDO supported project）


-7. 22

Power Electronics SystemOriginal optimal motor design algorithm

Stator

RotorOptimal

motor dimensions

Fatigue Crack

0.1mm

Solder

High Accuracy Strength AnalysisAnalysis tool for fatigue cracks in solder joints (developed for use in automotive LSIs, etc.)

Cu

Sn

Cu-SnCompound50µm

High-temperature Lead-free SolderSolder consists of

Cu powder / Sn powder mixed paste(developed for high heat-proof joints)

Examples of Hitachi Group Platform Research Achievements

Current waveform analysis


-8.Strengthening Global R&D Formation

22Hitachi America, Ltd. <40>

Hitachi Europe Ltd. <25> Hitachi (China) Research & Development Corporation <80>

Hitachi Asia Ltd. <5>(Singapore）

Magnetic Disks

April 2004 : Established independent R&D organization in China

April 2004 : Established Singapore Research Office

Quantum CommunicationsBioinformaticsOrganic Electronics

Storage Network SolutionsCar Information SystemsBroadband Wireless SystemsTotal Supply Chain Management

Technology

IP Network Home NetworkDigital TV

R&D Organization<Est. R&D Personnel (FY 2005)>

Main Research Themes

Open R&D Environment (1)


22 -9.

Customer Tsinghua UniversityShanghai Jiao Tong UniversityFudan University

Local Affiliates of Business Groups & Group CompaniesR&D Division• Planning• Development• Design• IP

Hitachi (China) Ltd.Hitachi (China) Ltd.

Hitachi (China)

R&D Corp.

・ Established：April 2005 (Beijing Head Office), June 2005 (Shanghai Branch Office) ・ Capital ：USD6,000,000・ Number of Employees： 80 (Estimate for 2005) → 120 (Estimate for 2006)

・ Established：April 2005 (Beijing Head Office), June 2005 (Shanghai Branch Office) ・ Capital ：USD6,000,000・ Number of Employees： 80 (Estimate for 2005) → 120 (Estimate for 2006)

Academic Collaboration

Col

labo

rativ

e C

reat

ion

Open R&D Environment (2)Establishment of Hitachi (China) Research & Development Corporation

• Localized Development• R&D Hub Function• Localized Development• R&D Hub Function

1. Contribute to local business efforts as the R&D hub in China2. Strengthen relationship with the government and major universities in China 3. Employ and develop talented staff


Development of innovative Development of innovative technology through comprehensive technology through comprehensive collaborative alliances with collaborative alliances with universities and participation in universities and participation in national projectsnational projects

sample

2mm×2mm×1.5mm

sample

2mm×2mm×1.5mm

Widespread Disaster Recovery TechnologyWidespread Disaster Recovery Technology

Successful application in compensation of signal deterioration in optical fibers

Photonic Crystal Device for Optical CommunicationsPhotonic Crystal Device for Optical Communications

Main Site

Back-up SiteA method to update data at the back-up site using transmission log data was developed, reducing telecommunication costs by 40%.

Update

22・ Univ. of Tokyo ・ MEXT*・ Univ. of Tokyo ・ MEXT*

・ Univ. of Tokyo・ MEXT*・ NEDO**

・ Univ. of Tokyo・ MEXT*・ NEDO**

Open R&D Environment (3)-10.

ログ

ログﾃﾞｰﾀ

ﾃﾞｰﾀLog

LogData

Data

*MEXT: Ministry of Education, Culture, Sports, Science & Technology**New Energy & Industrial Technology Development Organization



1

FY 2005 Harvest

2


3

4

Introduction


Contents


-1.33Priority allocation of research resources to contribute to earnings in FY 2005

Biometric personal authentication, RFID chips, secure client serversUbiquitous Solutions

Beat washing, motors, inverterHome Appliances

Accelerator, radiation control technologyProton Beam Cancer Therapy System*

High efficiency, low cost, environment-conscious, combustion analysis technology

Coal Thermal Power Generation System*

IPS mode systems, color reproduction, high yield technologyTFT LCDs for TV

Motors, engine control, automation, EMC analysisAutomotive Equipment (EPT, etc.)*

High resolution e-beam lithography, high-throughput analysisSemiconductor Manufacturing / Inspection Equipment*

ALIS, low driving voltage, high luminescence efficiencyPDP*

Perpendicular magnetic recording, signal processing, TSCM, high reliability technologyHDD*

High performance & reliability, new storage technologyStorage Solutions*

Technological Strong PointsBusiness

Priority Businesses Targeted for 2005 Harvest

*“ InspireA”


-2.33Semiconductor Inspection EquipmentProton Beam Cancer Therapy Systems

Home Appliance

Enhanced cleaning performance

BeatWash BeatWash : : New style New style washing machinewashing machinewith dryerwith dryer

Cyclonic Vacuum CleanerCyclonic Vacuum Cleaner

Improved suction efficiency(High power fan & motor)

AirAir--conditionerconditioner

Energy & Resource-saving Design

(Awarded ECCJ FY 2004 Grand Prize for Energy Conservation)

High Resolution High Resolution CDCD--Measurement SEMMeasurement SEM

Image Resolution： 2nmCompatible with 300 mm waferproduction line

Examples of Priority Businesses (1)

Synchrotron

Treatment Room


-3.33Ubiquitous Solution Business:

Platform technology for a safe, secure & comfortable society

Biometrics• Expand applications for Finger Vein

Personal Authentication equipment

Information Security

Security PC

Digital watermarking: 2004～・Preventing information leak (finance, government)・Contents protection (video, etc.)

PeopleTerminal

InformationSecure Social PlatformSecure Social Platform

・ Achievement of a strong security environment and further reduction of TCOCentral Management by

Blade-type PC Servers: 2005 ～　　・Central management of client PCs

Storage-centric: 2006 ～　　・Client data consolidation

and isolation

・ Develop solutions based on technological strengths

Examples of Priority Businesses (2)

Cryptography・Tamper resistant: 2007～・Light-weight, low power consuming

encryption・Custom LSI implementation &

deployment in various equipment

Entrance control: 2004～• Prevent illegal entry & theft

PC log-in control: 2005 ～Vehicle: 2007～

• Anti-theft• Information access• Driving-support

Bank ATM: 2005 ～


Business GroupsGroup Companies

Group managementstrategy reform

Group managementstrategy reform

Increase development

strength

Increase development

strengthFortify global MONOZUKURIFortify global MONOZUKURI

(Hitachi Group HQ)

(R&D Group) (MONOZUKURIEngineering Division)

Hitachi Gr. MONOZUKURI Fortification Approach

-4.33Contribute to low-cost production of “Inspire A” products & main products

Reduced manufacturing costReduced development timeReduced defect loss

FSW joint technology, CAE for manufacturing process, High-precision surface finishing, Embedded software production technologyHigh-frequency EMC design, Convergence Engineering for Modeling & Simulation, Beam application measurement

Quality management assessment method, Project risk management

ResultMONOZUKURI Technology High-frequency EMC Design Technology

Significant cut-back in EMC trouble-shooting time by clarification of the mechanisms based on magnetic field measurement near the circuit board.

EMC: Electro-Magnetic Compatibility

Circuit BoardMagnetic field measurement example

(1) Resource prioritization for MONOZUKURI strategic products

(2) Simultaneous Optimizationfor performance, high-reliability and cost

(3) Thorough pursuit of quality and yield

• HDDs• TFT LCDs for TVs

Increasing profit by strengthening MONOZUKURI technology

• PDPs• Automotive components



1

FY 2005 Harvest

2


3

4

Introduction


Contents


-1. 44

1. Fortify & foster technology platforms supporting core technologies2. Vertical integration of businesses in the Hitachi Group,

Black-boxing of technology3. Promotion of technology for incubation for future No. 1 businesses

Management Target: Achieve high-profit management in 2010

Approach: Fortify & foster No. 1 businesses (market share, profitability)

R&D Measures

Present & Next-generation

TechnologyThird generation

TechnologyParadigm-shifting

Technology

Core Technology 2010 （Select & Focus）

Priority allocation of R&D resources

Fortify & FosterNo.1

Businesses

Fortify & FosterNo.1

Businesses

R&D Approach to 2010


-2. 44 Strengthening Technology Platforms to Support Core Technologies

Mechanical & Electrical Electronics Information

No.1 Technology EducationBusiness Enterprise Competitiveness Improvement

Product CompetitivenessImprovementProductivity Improvement

Service Business DevelopmentSolution Operation Reform

Tech

nolo

gy P

latfo

rmTe

chno

logy

Pla

tform

ElectronicsEnvironment &

EnergyNew MaterialsMedical & Biotechnology

Nanotechnology

OutsourcingEA*/SoA**/Initial Stage ConsultingUtilization of Advantage

Technologies and DevicesNew Service Methodologies

Allocate platforms for core technologies in three areas

Service ScienceElectron BeamBased Measurement

Non-Destructive Measurement

Product Design Support

Solution LSIEfficient System

Development PlatformingProject Management

Embedded SystemsDigitalEngineeringMaterials

Mec

hani

cal

Inno

vatio

n C

ente

rM

echa

nica

l In

nova

tion

Cen

ter

March2005

Mat

eria

ls R

esea

rch

Labo

rato

ry

Adv

ance

d S

imul

atio

n C

ente

r

Adv

ance

d M

easu

rem

ent a

ndA

naly

sis

Cen

ter

Em

bedd

ed S

yste

ms

Pla

tform

Tec

hnol

ogy

Labo

rato

ry

Coo

pera

tive

Cre

atio

n w

ith

Cus

tom

ers

（Lab.

Ope

n-D

ays)

Cro

ss L

abor

ator

yP

roje

cts

From2002

April 2005

April2005

March2004

April2004

April2004

*EA： Enterprise Architecture**SoA：Service Oriented Architecture

Purpose

Details


44 -3.

Acoustics Research Lab.

Roof Top

Location： Hitachi-Naka-shi, IbarakiPersonnel： Approx. 400 (MERL*) Building: 3 storiesFloor space: 6,720m2

Strengthening mechanical & electrical research platforms

Collaboration with business divisions in the Hitachi-Naka region

(1) Power & Industrial Systems Gr. (2) Urban Planning & Development Systems(3) Automotive Systems (4) Renesas Technology Corp. (5) Hitachi High-Technologies Corporation, Hitachi Home & Life Solutions, Inc.

• World-class Acoustics Research Laboratory & wind-tunnel experimental labs

• Robotics research• Comfortable energy-conserving experimental

facilities• Car mechatronics research • MEMS manufacturing process research • Environment-conscious buildings

(1)(4)

(5)(2)

(3)

Hitachi System Plaza KatsutaHitachi System Plaza Katsuta

MERL*MERL*

Katsuta Station

Mechanical Innovation CenterMechanical Innovation Center

Mechanical Innovation Center　

　　　　　　　　　　　　(Established March 2005)

*Mechanical Engineering Research Lab.


-4.44

AVAV・・CIS Common PlatformCIS Common Platform

BroadbandBroadbandPCPC

HDD/DVDHDD/DVDAppliancesAppliances

Flat Panel TVFlat Panel TVCar NavigationCar Navigation

TelematicsTelematics

Embedded Systems Platform Laboratory (Approx. 80 staff)Embedded Systems Platform Laboratory (Approx. 80 staff)

Terrestrial digital broadcastingTerrestrial digital broadcastingAdvanced navigationAdvanced navigationHuman interfacesHuman interfaces

Development of Leading TechnologyDevelopment of Leading Technology

Increased quality & production Increased quality & production efficiencyefficiencyDevelopment techniques & process Development techniques & process innovationsinnovations

Development of Production TechnologyDevelopment of Production Technology

Digital Digital Consumer AppliancesConsumer Appliances

Vehicular Vehicular Information TerminalInformation Terminal

Purpose: Improve competitiveness & production efficiency in the electronics field

Embedded Software

Medical Diagnostic Equipment

Embedded Systems Platform Laboratory (Established April 2005)

SemiconductorManufac. Equip.

Automotive

TransportationSystems


-5.44

Technology Black-boxing

Technology, Know-how Integration

Hitachi GroupCollaboration

UbiquitousSolutions

Embedded SystemsPlatform LaboratoryEmbedded SystemsPlatform Laboratory

Mechanical Innovation Center

Mechanical Innovation Center

Vertically Integrated Businesses

Vertical Integration of Group Business & Black-boxing of Technology

Electric Power TrainsDigital TVs

TransportationSystems

Advanced MaterialsBatteriesCrystals

AdvancedSimulation Center

AdvancedSimulation Center

Material Research Lab.

Material Research Lab.

SoftwareCommon Platforms

Common Applications Digital TVs, MRIOriginal Key Components

Embedding Software

Embedded Systems Platform Research Laboratory

Embedded Systems Platform Research Laboratory


-6.44SensorNet Business: Taking roots in a safe, secure & comfortable society

Distortion sensor forstructural surveillancein buildings

March 2005March 2005

Network-based hydrogen detection system for hydrogen stations

Dec. 2004Dec. 2004

World’s smallest sensing node : 6.9cm3(Collaboration with YRP Ubiquitous Networking Laboratory)

SensorNode

Sensor

Controller

Pow

er AntennaRF unit

Oct. 2004Oct. 2004

3mm

TemperatureHumidityHumanpresenceAccelerationIlluminationInfra-red light

NEDO commissioned project

Examples of New Business Incubation

生活

Agriculture

Network

Industrial Infrastructure

Home

Social Infrastructure

Medical&Healthcare

SensorNet & Middleware Business• Management of data from numerous

sensing nodes• Detection of change in sensed data• Simple interface for data access• Administration of sensing node location and

condition

LogisticsOffice


Research Personnel: Laboratories & Development Centers

R&D expenditure

FY 2003 FY 2004 (estimate)

Revenue

Operating income

%R&D of Revenue (2)/(1)

372 390

8,632

185

4.44.3

Group Companies

Hitachi, Ltd.　

5,340

FY 2003 FY 2004 FY 2005 (estimate)

5,595Total

3,4601,880

3,5482,047

Group Companies

Hitachi, Ltd.

236 (64%)Business Groups

Corporate Laboratories

8,840

260

64 (17%)72 (19%)

5,760

3,6582,102

SupplementaryNotes

(billion JPY)

(1)

(2)

(billion JPY)

Size of the R&D Group


Thank you.


Cautionary Statement

Certain statements found in this document may constitute “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such “forward-looking statements” reflect management’s current views with respect to certain future events and financial performance and include any statement that does not directly relate to any historical or current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “intend,” “plan,” “project” and similar expressions which indicate future events and trends are used to assist readers in identifying these “forward-looking statements.” Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from those projected or implied in the “forward-looking statements” and from historical trends. Certain “forward-looking statements” are based on current assumptions of future events which may not prove to be accurate. Undue reliance should not be placed on “forward-looking statements,” as such statements speak only as of the date of this document.

Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking statement” and from historical trends include, but are not limited to:

rapid technological change, particularly in the Information & Telecommunication Systems segment and Electronic Devices segment;uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technology on a timely and cost-effective basis and to achieve market acceptance for such products;fluctuations in product demand and industry capacity, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment;increasing commoditization of information technology products, and intensifying price competition in the market for such products;fluctuations in rates of exchange for the yen and other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated, particularly between the yen and the U.S. dollar;uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing, particularly in the context of limited credit availability currently prevailing in Japan;uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand and/or exchange rates;general economic conditions and the regulatory and trade environment of Hitachi’s major markets, particularly, the United States, Japan and elsewhere in Asia, including, without limitation, continued stagnation or deterioration of the Japanese economy, or direct or indirect restriction by other nations on imports;uncertainty as to Hitachi’s access to, and ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies;uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain key products; anduncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write-down equity securities it holds.

The factors listed above are not all-inclusive and are in addition to other factors contained in Hitachi’s periodic filings with the U.S. Securities and Exchange Commission and in other materials published by Hitachi.

r&d for a high-profit growth company - hitachiplatform technology for a safe, secure &...

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