FOR IMMEDIATE RELEASE

FREMONT, CA � October 30, 2001 -- Read-Rite Corporation (Nasdaq:  RDRT) today reported net income and diluted earnings per share of $7.5 million and $0.06, respectively, for the fourth fiscal quarter ended September 30, 2001, on revenues of $154.5 million.  This is Read-Rite�s fourth consecutive quarter of profitability and reflects the company�s ninth consecutive quarter of GMR merchant market share gain.

For the year ended September 30, 2001, the company reported net income and fully diluted earnings per share of  $35.9 million and $0.30, respectively, on revenues of $712.9 million, a 28% increase over the $555.9 million reported in fiscal 2000.  Total cash and short-term investments grew to $153.7 million, an increase of $89.3 million during the fiscal year while at the same time debt was reduced by $193.2 million to $79.4 million.  On a pro forma basis, excluding net one-time charges of $0.5 million and the impact of the company�s portion of the Scion Photonics loss of $2.3 million, the company reported pro forma fiscal year net income and fully diluted earnings per share of $38.7 million and $0.33, respectively.

�This past fiscal year was truly a special one for Read-Rite.  We led the industry in technology advancements, we returned to profitability, we dramatically improved our balance sheet, we established Read-Rite as the clear cost leader in the design and manufacture of HGA�s and HSA's, and we continued to grow market share during the fiscal year,� stated Alan S. Lowe, president and chief executive officer.  He added, �our focus for fiscal year 2002 is not only to maintain these leadership positions but to become the technology standard for the industry, to continue our mission as the industry�s cost leader, to accelerate our drive for improvements in overall quality, and to remain profitable even in this uncertain demand environment.�

The company shipped 21.7 million heads and 2.2 million HSA�s during the quarter, compared to 22.5 million heads and 2.6 million HSA�s in the previous quarter.  Despite the decline in unit shipments, the company was able to increase market share to 42%, its ninth consecutive quarter of GMR share gain in the merchant market.  While the company experienced some reductions in the average selling price during the quarter, it was able to generate a profit for the quarter by improving yields and reducing manufacturing and other related costs.  The product mix was more heavily weighted towards the higher yielding 20GB and 30 GB per platter products.  The company is now ramping volume production of its 40GB products for multiple customers and expects its product mix to swing more heavily to the 40GB during the current quarter.

Read-Rite�s majority-owned subsidiary, Scion Photonics, Inc., reported revenues of $2.5 million and a loss of $8.4 million in its fourth fiscal quarter as it continues to invest heavily in research and development.  Scion recently announced the appointment of James R. Fultz as president and chief executive officer.  �We are thrilled to have attracted such a high caliber individual as Jim to lead Scion into the growth stage of its business life cycle.  We look forward to Scion becoming a very successful and profitable business,� stated Alan S. Lowe.

BUSINESS OUTLOOK

The following statements are based on current expectations.  These statements are forward-looking, and actual results may differ materially.

• The company is targeting revenue for the first fiscal quarter of 2002 to decrease approximately 5% from the fourth quarter of fiscal 2001 revenue of $154.5 million. 
• The company is targeting its recording head business to be slightly profitable in the first fiscal quarter of 2002.

The company continues to believe that long-term demand for data storage will continue to grow with the increased introductions of non-PC applications and the migration to network attached storage and storage area networks from direct attached server storage systems.  However, given the current state of the world economies and world events, demand beyond the December quarter remains uncertain.

 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.

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 the risk 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, its Quarterly Reports on Form 10-Q for the first quarter of fiscal 2001 ended December 31, 2000, second quarter of fiscal 2001 ended April 1, 2001 and third quarter of fiscal 2001 ended July 1, 2001.  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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