FOR IMMEDIATE RELEASE

READ-RITE LAUNCHES NEW FIBER OPTICS COMPANY - SCION PHOTONICS, INC.

FREMONT, CA - September  6, 2000 -- Read-Rite Corporation (Nasdaq: RDRT)  today announced that it has formed Scion Photonics, Inc. with $25 million in initial funding from Tyco Ventures, the venture capital unit of Tyco International Ltd., and Integral Capital Partners. The company also announced it was in discussions with several other interested parties for further technology and capital investments into Scion. Read-Rite is contributing its wafer fabrication facility in Milpitas, California, technical and management resources, and know-how and experience in thin-film technology and materials science. Scion Photonics is headquarted in Milpitas where its development and manufacturing wafer fabrication facility is located. Scion Photonics business charter is to design, manufacture and market high-performance optical components to the fiber optics communications market.

"We are very excited to announce the formation of Scion today and the investment and active involvement by our new partners, Tyco Ventures and Integral Capital. Read-Rite's core competencies are a great fit to address product opportunities in the fiber optics communications market. Scion will act as a separate company yet will have access to the resources and manufacturing infrastructure of Read-Rite," said Cyril J. Yansouni, Read-Rite's chairman of the board. "We believe having access to Read-Rite's resources will be a major differentiator for Scion in the marketplace," he added.

"We are very pleased to partner with Read-Rite in the establishment of Scion Photonics to serve the fast-growing fiber optics components market", said Richard A. Kashnow, President of Tyco Ventures, the venture capital unit of Tyco. "We believe that Read-Rite's manufacturing skills in thin-film technologies can be applied successfully to build competitive advantage in the production of fiber optics components. In addition to our $15 million investment in Scion, we have also invested $15 million in Read-Rite through a private placement with the company," Kashnow added.

"Manufacturing optical components is exceptionally difficult. We believe Scion has a unique opportunity to leverage Read-Rite's contribution of facilities and domain expertise in thin-film technologies, precision assembly, and low cost manufacturing to create a high quality product portfolio in the explosive market for optical components," said Neil R. Strumingher, Manager, Integral Capital Partners. "Integral is highly confident in the Scion team and believe they have assembled the resources necessary to become a major force in this market," he added.

Read-Rite will support Scion's entry into the fiber optics market by providing back-end component, module and sub-system assembly services. The company believes its core competencies in high-volume, high-precision manufacturing and assembly of recording heads position it well in this emerging growth area. "Read-Rite's focus over the past several years has been to increase product yields, lower product costs, and increase the productivity of our people and capital assets. We believe that what we have learned over the last few years will likewise give Scion a competitive advantage in the fabrication and assembly of optical products," said Alan S. Lowe, the company's president and chief executive officer. "We also believe that there is a tremendous opportunity to reduce the cost of these products and increase the yields as the optical components industry will no doubt become more cost competitive over time," he added.

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 and Singapore. The company's website is located at http://www.readrite.com.

Read-Rite is also the majority shareholder of Scion Photonics, Inc. which designs, develops, manufactures and sells both custom and standard Dense Wavelength Division Multiplexers (DWDM) and other optical communication components to address the rapidly growing worldwide fiber-optic network expansion. The company is well funded by the backing of Read-Rite Corporation, Tyco Ventures and Integral Capital Partners. Scion's website is located at http://www.scionphotonics.com. 

This news release contains statements which include forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, and is subject to the "safe harbor" created by those sections. These statements include, but are not limited to, the company's anticipation that the date of the automatic conversion will be no later than October 19, 2000; the company's expectation that there will be a charge of approximately $29 million in the current quarter for the interest premium Read-Rite will incur due to the conversion; and the company's expectation that this conversion will have a positive impact of $80 million over the next four fiscal years on the financial results of the company. The company's actual results for future periods could differ materially from those projected in such forward-looking information. 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 Securities and Exchange Commission, including, but not limited to, its Annual Report on Form 10-K for fiscal 1999 and quarterly reports on Form 10-Q for the first, second and third quarters of Fiscal Year 2000 ended December 29, 1999, April 2, 2000 and July 2, 2000, respectively. 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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