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 | According to the U.S. Consumer Electronics Association, 2004 was a watershed year for the transition from analog to digital television (DTV). As DTV products entered mainstream distribution channels in increasing numbers, digital broadcasts multiplied across the country. The highest resolution and best picture quality of the digital television formats is provided by High Definition Television (HDTV). However, High Definition TV sets are still relatively expensive and the amount of programming in High Definition format is limited. Furthermore, the most popular format for distributing movies to the home, the DVD, does not yet display content in High Definition. As innovation in the semiconductors powering HD television sets reduces the cost of these TVs, a virtuous economic cycle is already beginning. Lower prices for HDTV sets will increase demand and in turn push down prices further, making these sets more affordable to consumers. With plentiful and economical HD TV sets available, the issue of how to transition DVD movies to high definition format will become more important. The Transition to HD DVDs Anticipating this trend, Memory-Tech Corporation, an affiliate of Mitsubishi International Corporation's (MIC's) parent Mitsubishi Corporation has partnered with Toshiba Corporation to develop a new disc to address the transition to High Definition (HD) content. This product has benefits for both consumers and producers of content. Consumers can view DVD content on standard DVD players and also enjoy HD content when the disc is played on a new HD DVD player. Content providers can offer the same content in two formats, or use the HD DVD layer for a feature movie and the DVD layer to store promotional videos or audio content, including the movie sound track. The new HD DVD players are expected to come to market in late 2005. Memory-Tech can make the new disc on existing manufacturing lines, which have the ability to produce both HD DVD and DVD discs. The cost of manufacturing the new disc is expected to be comparable to that of single-sided, dual-layer DVD-ROM or HD DVD-ROM discs, as it shares the same physical structure. According to Shiroharu Kawasaki, President and CEO of Memory-Tech, "The new technology Toshiba and Memory-Tech have jointly developed will help the industry to make a smooth transition from the current DVD business to the next generation DVD business without interfering with current DVD business growth." Hollywood Movies for Japanese Consumers Along with developing cutting-edge digital technology, Memory-Tech provides a complete menu of digital content services to clients ranging from mid-sized Japanese companies to major Hollywood studios. Memory-Tech's DVD content solutions are enabled by a state-of-the-art digital studio located in Tokyo. The studio's experienced creative staff plans and edits digital content, films and records, edits video and handles menu design. They translate and add subtitles, and design and localize printed material. The staff also handles video/audio compression, authoring and formatting, as well as emulation and quality control to provide an end-to-end service for clients. In the U.S., Memory Tech's DVD content business is supported by MIC. About Memory-Tech Memory-Tech Corporation was established in 1985 and is a leading OEM of optical disk including CDs and DVDs. Major Shareholders include Mitsubishi Corporation, Tokyo Denka Corporation, Pony Canyon Inc., and Avex Group Holdings Inc. Tokyo headquarters is located in Minami-Aoyama, Minato-ku, Tokyo. Sales in fiscal year 2003 were 13.6 billion yen (126.8 million USD; JPY 107 = USD 1). Memory-Tech offers a total service that includes planning, production and distribution of CDs and DVDs to major Japanese and U.S. film/music companies and computer manufacturers. The monthly production capability in Japan is 9.2 million CDs and 8 million DVDs, which makes the company the second largest manufacturer after Sony Music Manufacturing and an OEM leader in the industry. The company's factories in both Japan and China are Microsoft certified and manufacture high-quality products. In July 2003, Memory-Tech received ISO9001: 2000 Certification. Memory-Tech intends to leverage the optical disc technology it has accumulated over the past 19 years, to expand new ventures such as the next-generation DVD (HD DVD) and to provide a comprehensive solution for clients. | 
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