Hitachi Metals, Ltd.

Tokyo, Japan June 26, 2008-Hitachi Metals, Ltd. today announced the development of a revolutionary new method for manufacturing sintered neodymium magnets^*1 that further boosts the performance of these advanced magnetic materials, which are already the world's strongest known permanent magnets.

The use of heavy rare-earth elements such as Dy (dysprosium) is essential to improve the heat resistance of Nd (neodymium) magnetic materials. However, the mass production of items incorporating rare-earth elements, which are considered extremely precious natural resources, is limited. Because of this, the development of a technology that maximizes the effectiveness of how these precious resources are used has been long anticipated.

Hitachi Metals' new manufacturing method uses a specialized vapor deposition/diffusion technology that makes controlling the Dy concentration distribution within a magnetic material possible. Surprisingly, not only has this technology proven to be the most effective and easiest production process developed for this purpose, it also helps improve the performance of advanced-functioning magnetic materials.

The Company verified that sintered neodymium magnets made using this new method are able to maintain the same remanence compared with the same Nd component ratio displayed by the Company's existing NEOMAX^® permanent magnets while increasing intrinsic coercivity by 320kA/m (4kOe)^*2 or above.

Furthermore, this technology makes it possible to increase remanance by 40mT (400G)^*2 and above while preserving intrinsic coercivity equal to that of existing products.

In March 2006, Hitachi Metals took the lead ahead of its competitors to file its first patent application^*3 for these technologies and has since made several filings for a wide range of other patents.

The Company is currently conducting production trials for customers with the aim of expanding the application of this technology sequentially and in response to specific customer requests.