FOR IMMEDIATE RELEASE

READ-RITE ANNOUNCES THIRD QUARTER FISCAL 2002 RESULTS

FREMONT, CA � July 31, 2002 -- Read-Rite Corporation (Nasdaq: RDRT) today announced net sales of $36.5 million for the third quarter of fiscal 2002, and a net loss and net loss per share of $78.5 million and $0.65 per share, respectively.  These results include the previously announced net gain of $8.1 million related to the sale of Scion Photonics to JDS Uniphase.  The difference in loss from the company�s previous guidance of June 24th is the result of a charge of $16.7 million mainly for 40 gigabyte per platter inventory, and a $6.8 million asset related write down for the company�s Philippine�s real estate.  For the nine-month period ending June 30, 2002, net sales were $224.8 million, with a net loss and net loss per share of $159.6 million and $1.33, respectively.  Read-Rite ended the quarter with a cash balance of $68.1 million, down from the March quarter balance of $100.2 million.

�We are disappointed in the results for the quarter,� said Alan S. Lowe, president and chief executive officer.  �We are diligently working with our customers to regain our market share on the 60 and 80 gigabyte per platter programs, which are currently in qualification.  We expect qualification on a number of these programs to be completed in August, resulting in volume shipments at these capacities in September.  This will position us well for higher revenue for the first quarter of fiscal 2003.  Additionally, to reduce our break-even level, we have taken cost cutting actions, including a worldwide reduction in workforce announced earlier this month, which will result in annual savings of approximately $30 to $40 million,� he added.

Business Outlook

The statements that follow are based upon current expectations, are forward looking, and actual results may differ materially:

•         The company expects revenue for the quarter ending September 30, 2002 to be essentially the same as the revenue for the past quarter, and expects the operating loss for the fourth quarter to be similar to the June quarter�s loss, excluding the non-recurring charges for the respective quarters.
  

•         The company expects to qualify and ramp production shipments for multiple 60 and 80 GB per platter products for its customers during the current quarter.  In anticipation of volume shipments, the company has ramped production in its wafer fab facility in support of these programs.
  

•         As a result of the company�s cost cutting measures, it expects to record charges of approximately $20 million for restructuring in the September quarter. 

   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 hard disk drives and tape drives.  The company is headquartered in Fremont, California and has operations in Japan, Thailand, the Philippines and Singapore.  The company�s home page on the world wide web is at http://www.readrite.com.

This release contains forward-looking statements that 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.  The forward-looking statements in this release include statements addressing the following subjects: working with customers to regain market share on the 60 and 80 gigabyte per platter programs; anticipated qualifications of 60 and 80 gigabyte per platter programs in August resulting in volume shipments at these capacities in September; cost cutting actions which will result in annual savings of approximately $30 to $40 million; higher revenue anticipated in the first quarter of fiscal 2003; revenue and the operating loss in the September quarter of fiscal 2002 to be essentially the same as revenue and the operating loss in the June quarter of fiscal 2002; and the company expects to record restructuring charges of approximately $20 million in the September quarter.  The company�s actual results could differ materially from those projected in such forward-looking statements.  Factors that could cause actual results to differ include, but are not limited to:  there may be reductions, cancellations or rescheduling of orders; the company may be unsuccessful in qualifying and ramping production on the 60GB or 80GB per platter products, the company may be unsuccessful in quickly ramping volume production of heads for higher density drives in the future; design-ins or qualifications of the company�s products on future programs may not occur or could take place at a slower rate than anticipated, the company may be unsuccessful in achieving and maintaining satisfactory yields, and other 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 2001 and the Quarterly Reports on Form 10-Q for the first and second fiscal quarter of Fiscal Year 2002 ended December 30, 2001 and March 31, 2002, 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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