MILPITAS, CA -- November 4, 1998 -- Read-Rite Corporation (NASDAQ: RDRT) announced it has signed a patent license agreement concerning giant magnetoresistive (GMR) sensor technology with Forschungszentrum Juelich GmbH, (Juelich), one of the leading national research centers in the Federal Republic of Germany. The patent license allows Read-Rite to develop and manufacture GMR sensors based on the technology licensed from Juelich. Read-Rite Corporation views this license agreement as consistent with its mission of technological leadership in the magnetic recording head industry.

In an environment of rapid technological change, Read-Rite believes GMR technology is a key to the Company's ability to deliver recording sensors that function at areal densities beyond 4 gigabits per square inch. The Company is currently sampling spin valve/GMR heads to customers and is preparing for a rapid transition from aniostropic magnetoresistive (AMR) technology to GMR/spin valve technology in 1999. In September, Read-Rite announced a data storage world record with the successful demonstration of GMR heads using spin valve designs capable of an areal density of 13.5 gigabits per square inch. These designs, exhibiting a GMR figure-of-merit much greater than today's mass production soft adjacent layer based AMR heads, should have enough sensitivity to read information at densities beyond 13.5 gigabits per square inch.