EAD-RITE REPORTS SECOND FISCAL QUARTER RESULTS; COMPANY GROWS REVENUE, MAINTAINS PROFITABILITY, IMPROVES BALANCE SHEET AND REDUCES FIXED COSTS

FREMONT, CA - April 18, 2001 -- Read-Rite Corporation (Nasdaq: RDRT) today reported revenue growth and continued profitability in its results for the second fiscal quarter ended April 1, 2001. The company reported a pro forma net income and earnings per diluted share of $12.1 million and $0.10 respectively, on revenues of $193.3 million. Including a $5.4 million one-time charge and the impact of the company�s portion of the Scion Photonics results, the company reported net income and diluted earnings per share of $6.1 million and $0.05, respectively. Cash on the balance sheet increased by $15.5 million to $114.2 million while the company paid off $5 million in debt and Scion Photonics continued to invest in its optical business.

The one-time charge was primarily for the obsolescence of equipment, and the consolidation of its slider fabrication, head gimbal assembly (�HGA�), and head stack assembly (�HSA�) prototype and development activities to its operations in Thailand. The company expects that this consolidation will further improve the company�s HGA and HSA manufacturing efficiencies and the company does not expect any further charges for these items.

The company grew revenue to $193.3 million from $190.0 million for the previous quarter. Pro forma net income for the second quarter decreased slightly as the company experienced lower yields and higher manufacturing costs in the month of March. The increased costs were incurred during the ramp of the 30GB programs and additional spending on 40GB technology. Read-Rite shipped 23 million heads and 3.2 million HSAs during the quarter, compared to 23 million heads and 3.5 million HSAs for the previous quarter. Even though recording head shipments were flat quarter-to-quarter, Read-Rite believes it increased its market share during the quarter.

�We are proud of our accomplishments over the last several months in generating profits through the development, manufacturing and delivery of the best performing 20GB magnetic recording heads in the industry. Indeed, to realize quarter-to-quarter sequential revenue growth, maintain profitability and generate cash in the current environment of earnings and revenue shortfalls is no small accomplishment. Our long-term success continues to depend on providing time-to-market, high quality technology to our customers. With this in mind, the company�s immediate focus is the continued ramp of our 30GB per platter programs at increasing yields and completing the design of our 40GB per platter programs for volume manufacturing,� stated Alan S. Lowe, president and chief executive officer.

FIBER OPTICS BUSINESS

Scion Photonics reported a loss of $6.6 million on revenues of $0.2 million in the second fiscal quarter. Entering the June quarter, Scion had a $2.7 million backlog primarily for process automation equipment. During the second quarter, Scion shipped its first 100GHz filters, introduced its prototype 40-channel, 100 GHz array waveguide gratings (AWG�s), designed custom planar lightwave circuit (PLC) components, and delivered on several small contract development orders which Scion is hopeful will lead to larger volume orders in the future. Finally, Scion is in the process of closing its second round of financing and to date has over 50% of the funds committed from its current investors, of which Read-Rite is one.

BUSINESS OUTLOOK

Due to the uncertainty of the economy and the PC market, the company cannot provide specific earnings guidance for the third fiscal quarter. However, the company expects to maintain profitability even with an expected decline in revenue. Longer term, the company believes that demand for data storage will be strong with the emergence and growth of non-PC applications later this year and into the year 2002, and therefore remains confident of its long-term revenue and earnings growth potential.

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 Dense Wavelength Division Multiplexers (DWDM), contract manufacturing services and fiber optic assembly equipment.  Scion's website is located at http://www.scionphotonics.com.  

This release may contain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained in such forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, the factors described in the company's reports filed with the SEC, including, but not limited to, its Annual Report on Form 10-K for fiscal 2000 and Quarterly Report on Form 10-Q for the first quarter of Fiscal Year 2001 ended December 31, 2000. Read-Rite undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of such statements.

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