Progress report on the 2nd Phase of the
“NSK Business Restructuring Program”

(1) Expansion of business in China

• Establishment of a holding company in China (‘02)
• Establishment of a steering column production base in China (Start of production: Apr. ’04)

(2) Strengthen strategic alliances

• Establishment of joint venture company with The Timken Company to manufacture tapered
  roller bearings
  (Production expected to commence early ‘04)
• Comprehensive business tie-up of NSK and NTN’s large-size bearing business (June ’02)

<EA series>	<EM series>	<EW series>
(Expanding sales since ’98)	(Expanding sales since ’01)	(Expanding sales since ’01)

(3) Strengthen development of new products

• New Fujisawa Research and Development Center (April ‘02)
• Commercialization of electric linear actuators and vacuum tables for ion implantation systems.

<Electric linear actuator>

<Fujisawa R&D Center>

 The details of our so-called “offensive strategies” will be explained at our “Mid-term Business Strategy Meeting” next February, but before we close, I would like to touch on this briefly at this time.
 First of all, NSK Ltd. will establish by the end of 2002, a holding company in China as a means of further expanding and developing our business there. In addition, we will be establishing a steering column production company that will become the foothold of our automotive components business in China. Preparations for this plant are being made and operations are expected to commence April 2004.
 Secondly, in April 2002, NSK and The Timken Company agreed to establish a joint venture in Suzhou, China to manufacture tapered roller bearings. Production is expected to begin 2004. NSK and NTN also signed an agreement in June to a comprehensive business tie-up of their large-sized bearing businesses. This strategic alliance will enable us to reinforce our marketing efforts to the aftermarket on a worldwide level.
 Finally, in order to enhance our R&D capabilities, we built the new Fujisawa R&D Center. We have also implemented a new personnel evaluation system as well as implementing organizational changes. A concrete result of these activities is the increased collaboration of technologies from the bearings, automotive components and precision machinery & parts divisions. Electronic linear actuators, that have the potential to be used in a wide variety of next generation “by-wire” systems, are currently under development. Development of vacuum tables for ion implantation systems to be used in next-generation semiconductor production equipment is also underway.