Headquarters News

Jul 26, 2006

FOR IMMEDIATE RELEASE

Media Contacts:
Akira Kadota, International PR
  Tel: +81-3-3578-1237  Fax: +81-3-3436-6766
Panasonic News Bureau
  Tel: +81-3-3542-6205  Fax: +81-3-3542-9018

Panasonic to Strengthen Healthcare and PC Optical Disk Drive Businesses

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Osaka, Japan - Panasonic, the brand for which Matsushita Electric Industrial Co., Ltd. (MEI) is known, announced today that the company will step up its efforts in building up its healthcare and PC optical disk drive businesses, where strong growth is expected, through integration within the group companies.

The company plans to transfer Healthcare Business Company, an internal divisional company of MEI, to Panasonic Shikoku Electronics Co., Ltd. (PSEC). PSEC's PC optical disk drive business, including Blu-ray disc drives whose market is projected to grow rapidly, will be transferred to Panasonic Communications Co., Ltd. (PCC). PSEC and PCC are wholly-owned subsidiaries of MEI. The concerned parties will continue working on the details, as they have agreed in principle to implement the plan in April 2007.

The plan is outlined as follows:

1. Integration of healthcare business (blood glucose monitoring systems, ultrasonic diagnostic equipment, hearing aids, etc.)
The healthcare market is expanding globally with increased health concerns stemmed from rapid aging of the world's population and higher risk of developing lifestyle diseases as well as growing awareness of disease prevention. For example, the market for blood glucose monitoring systems, the current core products of the group's healthcare business, has recently been experiencing a double-digit annual growth rate. Further growth is expected on a global scale as diet becomes modernized.

Blood glucose monitoring systems are currently developed and produced by PSEC and sold by the Healthcare Business Company. The latter also handles development, production and sales of other healthcare-related products such as ultrasonic diagnostic equipment and hearing aids. By bringing these healthcare and medical device businesses under one roof of PSEC, Panasonic will be able to build a business structure integrated from manufacturing to sales to drive further profit growth and business expansion by capitalizing on the strengths of the two companies. (For further details, please refer to another press release titled "Matsushita Announces Integration of Healthcare Business through Business Division" dated July 26, 2006.)

2. Integration of PC optical disk drive business (Blu-ray disc drives, super multi-drives, DVD-RAM drives, etc.)
In the PC optical disk drive market, more advanced products such as super-multi drives have become available at lower prices. At the same time, consumer demand for reading and recording sizable data and high-definition content on the PC is increasing. Against such a backdrop, the market is anticipated to grow further.

Presently, PSEC handles half-height and slot-loading slim-line drives including Blu-ray disc drives for which a rapid growth is expected. PSEC's PC optical disk drive business will be incorporated into PCC which handles tray loading slim-line drives. Integration of all the PC optical disk drive operations will allow the company to establish a structure which can generate solid profits and compete efficiently in the highly competitive global arena.

About Panasonic
Best known by its Panasonic brand name, Matsushita Electric Industrial Co., Ltd. is a worldwide leader in the development and manufacture of electronic products for a wide range of consumer, business, and industrial needs. Based in Osaka, Japan, the company recorded consolidated net sales of US$76.02 billion for the year ended March 31, 2006. The company's shares are listed on the Tokyo, Osaka, Nagoya, New York (NYSE:MC) and Frankfurt* stock exchanges. For more information on the company and the Panasonic brand, visit the company's website at http://panasonic.net.

*Matsushita delisted its shares from the Amsterdam Stock Exchange in June 2006, and plans to complete delisting procedures for the Frankfurt Stock Exchange in August 2006.

<Reference>

	Integrated Divisions	Sales Results for the Year to March 2006
Health-care	Matsushita Electric Industrial Co., Ltd.   Healthcare Business Company	Approx. 53 billion yen	Approx. 53 billion yen (Excluding overlap)
	Panasonic Shikoku Electronics Co., Ltd.   Healthcare and Medical Business Group	Approx. 34 billion yen
PC Optical Disks	Panasonic Shikoku Electronics Co., Ltd.   Storage Products BU, Optical Disk Business	Approx. 47 billion yen*	Approx. 158 billion yen
	Panasonic Communications Co., Ltd.   Device Company, Optical Disk Category	Approx. 111 billion yen*

Headquarters	600 Saedo-cho, Tsuzuki-ku, Yokohama City, Kanagawa
Established	January 1, 2003
Business Overview	- Healthcare device business: ultrasonic diagnostic equipment, dental laser devices/hearing aids, etc. - Healthcare system business: intraoperative image systems/outpatient calling system, etc. - Healthcare solutions business: electronic health monitors, etc.
President	Mr. Satoshi Akaishi
Employees	330 (At the end of March 2006)

Panasonic Shikoku Electronics Co., Ltd.

Headquarters	2131-1, Minamigata, Toon City, Ehime
Established	November 21, 1969 (Founded as Matsushita Kotobuki Electronics Industries, Ltd.)
Business Overview	- Healthcare and medical business: blood glucose monitoring systems, etc. - Visual business: Digital video cameras, DVD/DVC multimedia displays, etc. - Device business: Blu-ray disc drivers, super multi-drives, fluid dynamic bearing motors for HDD, etc.)
President	Mr. Tomiyasu Chiba
Employees	Approx. 15,000* (At the end of March 2006)

Panasonic Communications Co., Ltd.

Headquarters	4-1-62 Minoshima, Hakata-ku, Fukuoka City, Fukuoka
Established	December 24, 1955 (Founded as Kyushu Matsushita Electric Co., Ltd.)
Business Overview	- Home network business: cordless phones, personal fax machines, interphones, IP phones, home security-related products - Office network business: PBX, business phones, digital imaging systems, electronic whiteboards, scanners - Optical/device business: optical disk drives, information devices, precision devices, etc.
President	Mr. Kazuyoshi Fujiyoshi
Employees	Approx. 17,300* (At the end of March 2006)

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