READ-RITE PROVIDES PRELIMINARY GUIDANCE OF LOWER REVENUES FOR THE SECOND FISCAL QUARTER; COMPANY ALSO ANNOUNCES PRELIMINARY FISCAL Q1 EARNINGS MEETING CONSENSUS ESTIMATES AND REPORTS NEW OUTSIDE INVESTMENT IN SCION

FREMONT, CA � January 17, 2002 -- Read-Rite Corporation (Nasdaq: RDRT) today announced, based on order bookings and shipments during the first few weeks of the current quarter, that preliminary guidance for the second fiscal quarter is for a significant decline in revenues from the first quarter and a loss from operations for its recording head business.  However, the company believes that revenues will increase in the third fiscal quarter from the second fiscal quarter. 

 The company also announced preliminary results for the first fiscal quarter of 2002, which ended December 30, 2001. These preliminary results indicate revenues of approximately $136 million based on shipments of 21.6 million HGAs.  The preliminary earnings results from the company�s recording head operations for the first quarter are expected to meet the current First Call mean estimate of $0.03 per diluted share. 

 The company also announced that its majority-owned subsidiary, Scion Photonics, Inc., has received $30M in funding in connection with its Series B financing round.  The $30M includes an equity investment of $5 million from a new outside investor and the conversion to equity of $25M in loans from the original investors.

 Read-Rite Corporation is one of the world's leading independent manufacturers of magnetic recording heads, head gimbal assemblies (HGAs) and head stack assemblies (HSAs) for disk drives and tape drives. The company is headquartered in Fremont, California and has operations in California, Thailand, the Philippines, Japan, Singapore and South Korea. The company's website is located at http://www.readrite.com. Read-Rite is also the majority shareholder of Scion Photonics, Inc., an integrated solution provider to the fiber optics industry whose offerings include advanced DWDM products, fiber optic assembly equipment and application specific photonic components. Scion's website is located at http://www.scionphotonics.com.