Toshiba Announces Discontinuation of HD DVD Businesses

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Toshiba Corporation today announced that it has undertaken a
thorough review of its overall strategy for HD DVD and has decided it
will no longer develop, manufacture and market HD DVD players and
recorders. This decision has been made following recent major changes
in the market. Toshiba will continue, however, to provide full product
support and after-sales service for all owners of Toshiba HD DVD
products.

HD DVD was developed to offer consumers access at an affordable
price to high-quality, high definition content and prepare them for
the digital convergence of tomorrow where the fusion of consumer
electronics and IT will continue to progress.

"We carefully assessed the long-term impact of continuing the
so-called ´next-generation format war´ and concluded that a swift
decision will best help the market develop," said Atsutoshi Nishida,
President and CEO of Toshiba Corporation. "While we are disappointed
for the company and more importantly, for the consumer, the real mass
market opportunity for high definition content remains untapped and
Toshiba is both able and determined to use our talent, technology and
intellectual property to make digital convergence a reality."

Toshiba will continue to lead innovation, in a wide range of
technologies that will drive mass market access to high definition
content. These include high capacity NAND flash memory, small form
factor hard disk drives, next generation CPUs, visual processing, and
wireless and encryption technologies. The company expects to make
forthcoming announcements around strategic progress in these
convergence technologies.

Toshiba will begin to reduce shipments of HD DVD players and
recorders to retail channels, aiming for cessation of these businesses
by the end of March 2008. Toshiba also plans to end volume production
of HD DVD disk drives for such applications as PCs and games in the
same timeframe, yet will continue to make efforts to meet customer
requirements. The company will continue to assess the position of
notebook PCs with integrated HD DVD drives within the overall PC
business relative to future market demand.

This decision will not impact on Toshiba´s commitment to standard
DVD, and the company will continue to market conventional DVD players
and recorders. Toshiba intends to continue to contribute to the
development of the DVD industry, as a member of the DVD Forum, an
international organization with some 200 member companies, committed
to the discussion and defining of optimum optical disc formats for the
consumer and the related industries.

Toshiba also intends to maintain collaborative relations with the
companies who joined with Toshiba in working to build up the HD DVD
market, including Universal Studios, Paramount Pictures, and
DreamWorks Animation and major Japanese and European content providers
on the entertainment side, as well as leaders in the IT industry,
including Microsoft, Intel, and HP. Toshiba will study possible
collaboration with these companies for future business opportunities,
utilizing the many assets generated through the development of HD DVD.

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