UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                                       OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                       For the Quarter Ended April 4, 1999
                         Commission File Number 0-16852


                               KOMAG, INCORPORATED
                                  (Registrant)


                      Incorporated in the State of Delaware
                I.R.S. Employer Identification Number 94-2914864
               1704 Automation Parkway, San Jose, California 95131
                            Telephone: (408) 576-2000

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  Registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                              Yes _X_     No ___.

On April 4, 1999,  53,920,523 shares of the Registrant's common stock, $0.01 par
value, were issued and outstanding.

                                      -1-

<PAGE>


                                      INDEX

                               KOMAG, INCORPORATED


Page No.

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements (Unaudited)

        Consolidated statements of operations--Three months
        ended April 4, 1999 and March 29, 1998 ............................... 3

        Consolidated balance sheets--April 4, 1999
        and January 3, 1999 .................................................. 4

        Consolidated statements of cash flows--Three months
        ended April 4, 1999 and March 29, 1998 ............................... 5

        Notes to consolidated financial statements--
        April 4, 1999 ..................................................... 6-10

Item 2. Management's Discussion and Analysis of
        Financial Condition and Results of Operations .................... 11-17

PART II. OTHER INFORMATION

Item 1. Legal Proceedings ................................................... 18

Item 2. Changes in Securities ............................................... 18

Item 3. Defaults Upon Senior Securities ..................................... 18

Item 4. Submission of Matters to a Vote of Security Holders ................. 18

Item 5. Other Information ................................................... 18

Item 6. Exhibits and Reports on Form 8-K .................................... 18

SIGNATURES .................................................................. 19

                                      -2-

<PAGE>


PART I.   FINANCIAL INFORMATION

<TABLE>
                                                         KOMAG, INCORPORATED
                                                CONSOLIDATED STATEMENTS OF OPERATIONS
                                                (In Thousands, except per share data)
                                                             (Unaudited)

<CAPTION>
                                                                                                         Three Months Ended
                                                                                                     ------------------------------
                                                                                                      April 4             March 29
                                                                                                       1999                 1998
                                                                                                     ---------            ---------
<S>                                                                                                  <C>                  <C>      
Net sales                                                                                            $  90,013            $  76,057
Cost of sales                                                                                           89,266              107,652
                                                                                                     ---------            ---------
          GROSS PROFIT (LOSS)                                                                              747              (31,595)

Operating expenses:
     Research, development and engineering                                                              12,015               14,944
     Selling, general and administrative                                                                 5,478                4,611
                                                                                                     ---------            ---------
                                                                                                        17,493               19,555
                                                                                                     ---------            ---------
          OPERATING LOSS                                                                               (16,746)             (51,150)

Other income (expense):
     Interest income                                                                                     1,616                2,552
     Interest expense                                                                                   (5,004)              (4,554)
     Other, net                                                                                            661                4,323
                                                                                                     ---------            ---------
                                                                                                        (2,727)               2,321

Loss before income taxes, minority interest,                                                         ---------            ---------
   and equity in joint venture loss                                                                    (19,473)             (48,829)
Provision for income taxes                                                                                 400                 --
                                                                                                     ---------            ---------
Loss before minority interest and equity in
   joint venture loss                                                                                  (19,873)             (48,829)
Minority interest in net income (loss) of consolidated subsidiary                                          251                  (95)
Equity in net loss of unconsolidated joint venture                                                      (1,402)              (9,424)
                                                                                                     ---------            ---------
          NET LOSS                                                                                   $ (21,526)           $ (58,158)
                                                                                                     ---------            ---------


Basic loss per share                                                                                 $   (0.40)           $   (1.10)
                                                                                                     ---------            ---------
Diluted loss per share                                                                               $   (0.40)           $   (1.10)
                                                                                                     ---------            ---------

Number of shares used in basic computation                                                              53,915               52,875
                                                                                                     ---------            ---------
Number of shares used in diluted computation                                                            53,915               52,875
                                                                                                     ---------            ---------

<FN>
                                           See notes to consolidated financial statements.
</FN>
</TABLE>

                                                                 -3-

<PAGE>


<TABLE>
                                                         KOMAG, INCORPORATED
                                                     CONSOLIDATED BALANCE SHEETS
                                                           (In Thousands)

<CAPTION>
                                                                                                     April 4               January 3
                                                                                                      1999                   1999
                                                                                                    --------               --------
                                                                                                  (unaudited)               (note)
<S>                                                                                                   <C>                    <C>   
ASSETS
Current Assets
      Cash and cash equivalents                                                                       64,670                 64,467
      Short-term investments                                                                          61,000                 63,350
      Accounts receivable less allowances of
           $2,807 in 1999 and $2,847 in 1998                                                          45,016                 42,922
      Accounts receivable from related parties                                                           147                    512
      Inventories:
           Raw materials                                                                               7,853                  8,434
           Work-in-process                                                                             7,798                 10,672
           Finished goods                                                                             13,872                 14,534
                                                                                                    --------               --------
               Total inventories                                                                      29,523                 33,640
      Prepaid expenses and deposits                                                                    3,466                  4,348
      Income taxes receivable                                                                          2,216                  2,216
      Deferred income taxes                                                                            7,883                  7,883
                                                                                                    --------               --------
               Total current assets                                                                  213,921                219,338
Investment in Unconsolidated Joint Venture                                                              --                    1,399
Property, Plant and Equipment
      Land                                                                                             7,785                  7,785
      Building                                                                                       128,385                128,359
      Equipment                                                                                      692,140                686,169
      Furniture                                                                                       10,919                 10,911
      Leasehold Improvements                                                                          86,794                 86,565
                                                                                                    --------               --------
                                                                                                     926,023                919,789
      Less allowances for depreciation and amortization                                             (471,074)              (449,772)
                                                                                                    --------               --------
               Net property, plant and equipment                                                     454,949                470,017
Deposits and Other Assets                                                                              3,105                  3,341
                                                                                                    --------               --------
                                                                                                     671,975                694,095
                                                                                                    ========               ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
      Current portion of long-term debt                                                              260,000                260,000
      Trade accounts payable                                                                          25,815                 27,274
      Accounts payable to related parties                                                              1,800                  1,848
      Accrued compensation and benefits                                                               15,290                 15,544
      Other liabilities                                                                                7,821                  7,382
      Income taxes payable                                                                               145                    134
                                                                                                    --------               --------
               Total current liabilities                                                             310,871                312,182
Deferred Income Taxes                                                                                 52,564                 52,564
Other Long-term Liabilities                                                                            1,551                  1,403
Minority Interest in Consolidated Subsidiary                                                           4,390                  4,139
Stockholders' Equity
      Preferred stock                                                                                   --                     --
      Common stock                                                                                       539                    539
      Additional paid-in capital                                                                     407,867                407,549
      Accumulated deficit                                                                           (106,386)               (84,860)
      Accumulated other comprehensive income                                                             579                    579
                                                                                                    --------               --------
               Total stockholders' equity                                                            302,599                323,807
                                                                                                    --------               --------
                                                                                                     671,975                694,095
                                                                                                    ========               ========

Note: The balance sheet at January 3, 1999 has been derived from the audited financial statements at that date.
</TABLE>

                                                                 -4-

<PAGE>


<TABLE>
                                                         KOMAG, INCORPORATED
                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                           (In Thousands)
                                                             (Unaudited)

<CAPTION>
                                                                                                           Three Months Ended
                                                                                                       ----------------------------
                                                                                                        April 4           March 29
                                                                                                          1999               1998
                                                                                                       ---------          ---------
<S>                                                                                                    <C>                <C>       
OPERATING ACTIVITIES
      Net loss                                                                                         $ (21,526)         $ (58,158)
      Adjustments to reconcile net loss to net cash
          provided by operating activities:
            Depreciation and amortization                                                                 23,761             34,635
            Provision for losses on accounts receivable                                                       33               (838)
            Equity in net loss of unconsolidated joint venture                                             1,402              9,424
            (Gain) Loss on disposal of property, plant and equipment                                         222             (2,728)
            Deferred rent                                                                                    148                110
            Minority interest in net income (loss) of consolidated subsidiary                                251                (95)
            Changes in operating assets and liabilities:
                  Accounts receivable                                                                     (2,127)            30,738
                  Accounts receivable from related parties                                                   365              2,020
                  Inventories                                                                              4,117              6,216
                  Prepaid expenses and deposits                                                              879                (93)
                  Trade accounts payable                                                                  (1,459)           (13,991)
                  Accounts payable to related parties                                                        (48)            (4,100)
                  Accrued compensation and benefits                                                         (254)             3,264
                  Other liabilities                                                                          439                316
                  Income taxes receivable/payable                                                             11             21,055
                                                                                                       ---------          ---------
                           Net cash provided by operating activities                                       6,214             27,775

INVESTING ACTIVITIES
      Acquisition of property, plant and equipment                                                        (8,915)           (41,378)
      Purchases of short-term investments                                                                   --              (44,400)
      Proceeds from short-term investments at maturity                                                     2,350               --
      Proceeds from disposal of property, plant and equipment                                               --                4,930
      Deposits and other assets                                                                              236                291
                                                                                                       ---------          ---------
                         Net cash used in investing activities                                            (6,329)           (80,557)

FINANCING ACTIVITIES
      Increase in long-term obligations                                                                     --               15,000
      Sale of Common Stock, net of issuance costs                                                            318                836
                                                                                                       ---------          ---------
                         Net cash provided by financing activities                                           318             15,836

                      Increase (decrease) in cash and cash equivalents                                       203            (36,946)

      Cash and cash equivalents at beginning of year                                                      64,467            133,897
                                                                                                       ---------          ---------

                      Cash and cash equivalents at end of period                                       $  64,670          $  96,951
                                                                                                       =========          =========

<FN>
                                           See notes to consolidated financial statements.
</FN>
</TABLE>

                                                                 -5-

<PAGE>


                               KOMAG, INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                  APRIL 4, 1999


NOTE 1 - BASIS OF PRESENTATION

         The accompanying  unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of Management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included.  Operating results for the three-month period ended April 4, 1999
are not necessarily  indicative of the results that may be expected for the year
ending January 2, 2000.

         The financial  statements  have been prepared on a going concern basis.
The Report of Independent Auditors on the Company's financial statements for the
year ended  January  3, 1999  included  in Form 10-K  contained  an  explanatory
paragraph  which  indicated  substantial  doubt about the  Company's  ability to
continue  as a going  concern  because  of recent  operating  losses and lack of
compliance  with  certain  covenants  of  its  various  bank  agreements.   Such
non-compliance  constitutes  and  event of  default  under the  agreements.  The
Company has not been in payment  default under these credit  facilities  and has
continued  to pay all  interest  charges  and other fees  associated  with these
facilities  on their  scheduled  due  dates.  Amounts  outstanding  under  these
unsecured credit agreements at April 4, 1999 amounted to $260 million.  To date,
the Company's  lenders have not accelerated  any principal  payments under these
facilities. The Company is currently negotiating with its lenders for amendments
to its existing  credit  facilities.  There can be no assurance that the Company
will be able to obtain such amendments to its credit  facilities on commercially
reasonable terms. In the event that the Company does not successfully  amend its
credit  facilities or  restructure  its debt  obligations,  the Company could be
required to significantly reduce or possibly suspend its operations, and/or sell
additional  securities  on  terms  that  would be  highly  dilutive  to  current
stockholders  of the  Company.  The  financial  statements  do not  include  any
adjustments  to reflect the possible  future effects on the  recoverability  and
classification  of assets  or the  amounts  and  classification  of  assets  and
liabilities that may result from the outcome of this uncertainty.

                                      -6-

<PAGE>


         For further information, refer to the consolidated financial statements
and footnotes  thereto  included in the Company's Annual Report on Form 10-K for
the year ended January 3, 1999.

         The Company uses a 52-53 week fiscal year ending on the Sunday  closest
to December  31. The  three-month  reporting  periods for the  comparable  years
included in this report are each comprised of thirteen weeks.


NOTE 2 - INVESTMENT IN DEBT SECURITIES

         The Company  invests its excess cash in  high-quality,  short-term debt
and equity  instruments.  None of the Company's  investments in debt  securities
have  maturities  greater  than one year.  The  following  is a  summary  of the
Company's   investments   by  major   security  type  at  amortized  cost  which
approximates  fair value:


                                                             Apr 4        Jan 3
(in thousands)                                               1999         1999
                                                           --------     --------
Municipal auction rate preferred stock                     $ 61,000     $ 63,350
Corporate debt securities                                    31,186       33,765
Mortgage-backed securities                                   27,482       34,060
                                                           --------     --------
                                                           $119,668     $131,175
                                                           ========     ========

Amounts included in cash and cash equivalents              $ 58,668     $ 67,825
Amounts included in short-term investments                   61,000       63,350
                                                           --------     --------
                                                           $119,668     $131,175
                                                           ========     ========

         The Company  utilizes  zero-balance  accounts and other cash management
tools to invest all available  funds  including  bank balances in excess of book
balances.


NOTE 3 - INCOME TAXES

         The Company's  income tax provision of  approximately  $0.4 million for
the first quarter of 1999 primarily  represents  foreign  withholding taxes. The
Company's  wholly-owned  thin-film  media  operation,  Komag USA (Malaysia) Sdn.
("KMS")  received  an  extension  of its  initial  five-year  tax holiday for an
additional five years commencing July 1998. KMS has also been granted a ten-year
tax holiday for its second and third plant sites in Malaysia.  The  commencement
date for this new tax holiday has not been determined as of May 13, 1999.

                                      -7-

<PAGE>


NOTE 4 - COMPREHENSIVE LOSS

         The following are the components of comprehensive loss:


                                                           Three Months Ended
                                                        -----------------------
                                                         Apr 4          Mar 29
                                                          1999           1998
                                                        --------       --------
(in thousands)
Net loss                                                $(21,526)      $(58,158)
Foreign currency translation adjustments                    --           (1,927)
                                                        --------       --------
Comprehensive loss                                      $(21,526)      $(60,085)
                                                        --------       --------

         Accumulated   foreign   currency   translation   adjustments   on   the
accompanying  Consolidated  Balance  Sheets  account  for  all of the  Company's
accumulated other comprehensive loss at April 4, 1999 and March 29, 1998.

                                      -8-

<PAGE>


NOTE 5 - LOSS PER SHARE

         The net loss per share was  computed  using  only the  weighted-average
number of shares of common stock  outstanding  during the period.  The following
table sets forth the computation of net loss per share.


                                                         Three Months Ended
                                                      -------------------------
                                                       Apr 4            Mar 29
                                                        1999             1998
                                                      --------         --------
(in thousands, except per share amounts)

Numerator:  Net loss                                  $(21,526)        $(58,158)
                                                      --------         --------

Denominator for basic
       loss per share -
       weighted-average shares                          53,915           52,875
                                                      --------         --------

Effect of dilutive securities:
       Employee stock options                             --               --

Denominator for diluted
                                                      --------         --------
       loss per share                                   53,915           52,875
                                                      --------         --------

Basic loss per share                                  $  (0.40)        $  (1.10)
                                                      --------         --------

Diluted loss per share                                $  (0.40)        $  (1.10)
                                                      --------         --------

Incremental  common shares  attributable to the exercise of outstanding  options
(assuming  proceeds would be used to purchase  treasury  stock) of 2,077,738 and
882,687  for  the  three  months  ended  April  4,  1999  and  March  29,  1998,
respectively,  were not included in the net loss per share  computation  because
the effect would be antidilutive.


NOTE 6 - USE OF ESTIMATES

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the amounts  reported in the financial  statements  and
accompanying notes. Actual results could differ from those estimates.


NOTE 7 - SUBSEQUENT EVENT

         In April 1999,  the  Company  purchased  the assets of Western  Digital
Corporation's  media  operations  through  the  issuance of  approximately  10.8
million shares of the Company's  Common Stock, a note in the principal amount of
$30.1 million,

                                      -9-

<PAGE>


and cash  consideration  of $1.6 million.  The shares issued in the transaction,
which  represent  16.7% of the Company's  outstanding  shares on a post-issuance
basis, are unregistered and subject to trading restrictions. Western Digital may
resell  these  shares in specified  increments  over a three and  one-half  year
period under registration rights granted by the Company or under SEC rules after
expiration of the required  holding  periods.  Principal and interest accrued on
the note are due in three years and the note is  subordinated  to the  Company's
senior credit facilities.  In the event Western Digital realizes a return on its
Komag equity  holdings in excess of a targeted  amount  within three years,  the
excess  amount  will reduce the  balance  due under the note.  The Company  also
assumed certain  liabilities,  mainly equipment and building leases,  as part of
the transaction.  Additionally,  the Company and Western Digital signed a volume
purchase agreement under which the Company will supply a substantial  portion of
Western Digital's media needs over the next three years.

                                      -10-

<PAGE>


                               KOMAG, INCORPORATED

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Results of Operations:

         The  following  discussion  contains  predictions,  estimates and other
forward-looking  statements  that  involve a number of risks and  uncertainties.
These  statements  may be  identified  by the use of  words  such as  "expects,"
"anticipates,"  "intends," "plans," and similar expressions.  While this outlook
represents  the  Company's  current  judgment  on the  future  direction  of the
business,  such risks and  uncertainties  could cause  actual  results to differ
materially  from any  future  performance  suggested  herein.  Due to a recently
completed volume purchase  agreement with Western Digital  Corporation  ("WDC"),
the Company's  results are more dependent on the relative  success of WDC in the
data storage  market.  Other  factors that could cause actual  results to differ
include the following:  disk  consumption per drive based on the relative growth
rates of areal density and overall storage usage;  pricing levels  determined by
the continuing  imbalance  between  supply and demand for disk products;  growth
rate of the  merchant  disk market as  influenced  by the level of captive  disk
production;  structural  changes  within  the disk  media  industry  created  by
combinations,  failures,  and joint venture  arrangements;  unit volumes derived
from new product  qualifications;  costs related to  consolidation  of the media
operations  of  Komag  and  WDC;  changes  in  manufacturing  efficiencies,   in
particular product yields and material input costs;  factory utilization levels,
including absorption of the additional fixed manufacturing costs associated with
the recently acquired WDC facilities; and capital expenditure levels required to
maintain or acquire process  equipment with  capabilities to meet more stringent
future product  requirements.  Moreover,  the Company will need  sufficient cash
resources to operate  efficiently.  The  Company's  ability to raise  additional
funding will be affected by the status of the Company's  credit  facilities  and
the audit  opinion  for the  Company's  1998  financial  statements.  Other risk
factors that may affect the Company's  financial  performance  are listed in the
Company's various SEC filings, including its Form 10-K for the fiscal year ended
January 3, 1999  which was filed on April 2, 1999.  The  Company  undertakes  no
obligation   to  publicly   release  the  result  of  any   revisions  to  these
forward-looking  statements which may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.

Recent Development:

         In April 1999, the Company  acquired the thin-film media  operations of
Western  Digital  Corporation  (WDC). As part of the acquisition the Company and
WDC also entered into a volume  purchase  agreement under which the Company will
supply a substantial portion of WDC's thin-film media requirements.  The Company
expects that second quarter of 1999 unit sales from the combined operations will
grow sequentially in the range of 20-35% compared to the Company's first quarter
of 1999 results.  The

                                      -11-

<PAGE>


Company  expects that its fixed costs,  including  goodwill  amortization,  will
increase by approximately  $10-12 million per quarter.  In addition,  as part of
the consolidation effort the Company extended job offers to approximately 50% of
the  WDC  media   employees  and  reduced  its  existing   U.S.   operations  by
approximately  8%. These actions resulted in a net increase of approximately 400
employees.  These additional payroll and fixed costs, coupled with the projected
volume  growth,  will widen the net loss for the second quarter of 1999 compared
the net loss reported for the first quarter of 1999.

Overview:

         Adverse market conditions, which began in mid-1997, continued to impact
the thin-film media market throughout 1998 and the first quarter of 1999. Demand
for disk drives grew rapidly  during the mid-1990s and industry  forecasts  were
for continued strong growth. The Company and a majority of its competitors (both
independent  disk  manufacturers  and  captive  disk   manufacturers   owned  by
vertically  integrated disk drive customers)  committed to expansion programs in
1996 and substantially  increased their media manufacturing capacity in 1997. In
1997 the rate of growth in demand  for disk  drives  fell  sharply.  Disk  drive
manufacturers  abruptly reduced orders for media from independent  suppliers and
relied more heavily on internal  capacity to supply a larger proportion of their
media requirements.  The media industry's  capacity expansion,  coupled with the
decrease in the rate of demand growth,  has resulted in excess media  production
capacity. This excess media production capacity caused sharp declines in average
selling prices for disk products as independent  suppliers  struggled to utilize
their capacity.

         In addition to adversities  caused by the excess supply of media,  1998
was a year of tremendous transition for the Company and the disk drive industry.
Disk drive programs  utilizing  newer,  more advanced,  magnetoresistive  ("MR")
media and recording heads replaced older generation programs utilizing inductive
media and heads. By the end of 1998 most disk drives were  manufactured  with MR
components.   The  transition  to  MR  disk  drives  has  led  to   significant,
unprecedented increases in areal density and, therefore, the amount of data that
can be  stored  on a single  disk  platter.  In the  first  quarter  of 1999 the
majority of the Company's 3 1/2-inch  disks were capable of storing at least 4.3
gigabytes  (GB) per  platter.  This  product mix  represents  a 34% jump in disk
capacity  relative  to a product  mix of  predominately  3.2 GB  platters in the
fourth  quarter  of  1998.   Such  increased   storage   capacity  allows  drive
manufacturers  to offer  lower-priced  disk  drives  at given  capacity  points,
especially in the price-sensitive desktop segment,  through the incorporation of
fewer  components into their disk drives.  The rapid  advancement in the storage
capacity  per disk  platter  has  further  slowed  disk  demand  throughout  the
industry. According to industry market analysts, this resulting reduction in the
average  number of disks per drive  will  likely  slow the  growth  rate of disk
shipments  below the growth rate of disk drives  during  1999.  The  significant
amount of captive  capacity  employed by certain disk drive  manufacturers  also
continues to reduce the market opportunities for independent disk suppliers such
as the Company.

                                      -12-

<PAGE>


Revenue:

         Net sales  increased to $90.0  million in the first quarter of 1999, up
18% compared to $76.1 million in the first quarter of 1998.  The  year-over-year
increase  was due to the net effect of a 39% increase in unit sales volume and a
17% decrease in the overall average  selling price.  Net sales in first quarters
of 1999 and 1998  included  $4.0 million and $1.3  million of  substrate  sales,
respectively.  The Company  periodically  sells substrate  products but does not
currently  anticipate  that such sales will become a significant  portion of its
revenue.  First quarter 1999 unit sales (excluding sales of substrate  products)
increased to 10.1 million  disks from 7.2 million  disks in the first quarter of
1998.  Unit sales for the first quarter 1998 were  unusually low due to weakened
demand for desktop media  products as several disk drive  manufacturers  sharply
reduced  their  desktop  product  production  during  early 1998 in  response to
supply/demand  imbalances  within the  industry.  The severe  pricing  pressures
generated by the continuing  imbalance in supply and demand for thin-film  media
in the first quarter of 1999 resulted in the significant year-over-year decrease
in the overall average selling price.

         In addition to sales of internally produced disk products,  the Company
has historically  resold products  manufactured by its 50%-owned  Japanese joint
venture,  Asahi Komag Co., Ltd.  (AKCL).  Distribution  sales of thin-film media
manufactured  by AKCL were negligible in the first quarter of 1999 and accounted
for $2.4  million  in the  first  quarter  of 1998.  The  Company  expects  that
distribution sales of AKCL product will be negligible for the remainder of 1999.

     During  the  first   quarter  of  1999  three   customers   accounted   for
approximately 90% of consolidated net sales:  Western Digital Corporation (58%),
Maxtor Corporation (22%) and International  Business Machines (10%). The Company
expects that it will continue to derive a substantial  portion of its sales from
relatively few customers.  The  distribution  of sales among  customers may vary
from quarter to quarter based on the match of the Company's product capabilities
with specific disk drive programs of customers. Additionally, as a result of the
April 1999  acquisition  of WDC's media  operation and related  volume  purchase
agreement, the Company's dependence on WDC will increase in the near term.

Gross Margin:

         The Company recorded a positive gross margin  percentage of 0.8% in the
first quarter of 1999 compared to a negative  gross margin of 41.5% in the first
quarter of 1998.  The  substantial  improvement  in the gross margin  percentage
resulted from the  combination of improvements  in  manufacturing  efficiencies,
higher unit production  volumes,  and reductions in fixed  manufacturing  costs.
These favorable  manufacturing  cost reductions more than offset the 17% decline
in the overall  average  selling price.  Manufacturing  efficiency  improvements
included both  improvements in production yields and reductions in product input
costs.  The Company  produced  10.1 million  units in the first  quarter of

                                      -13-

<PAGE>


1999 compared to 6.5 million units in the first quarter of 1998. The higher unit
production volume reduces the Company's unit cost as fixed costs are spread over
more  units.  Additionally,  fixed  manufacturing  costs were lower in the first
quarter of 1999 as a result of a $175.0 million asset impairment charge recorded
in June 1998. The asset impairment charge  effectively  reduced asset valuations
to reflect the economic  effect of industry price erosion for disk media and the
projected underutilization of the Company's production equipment and facilities.
Due to the reduced asset valuations depreciation expenses were approximately 30%
lower in the first quarter of 1999 compared to the first quarter of 1998.

Operating Expenses:

         Research  and  development   ("R&D")  expenses  decreased  19.6%  ($2.9
million)  to  $12.0  million  in the  first  quarter  of  1999  relative  to the
comparable  period  of 1998.  Decreased  R&D  staffing  and lower  facility  and
equipment costs (primarily due to the 1998 impairment charge) accounted for most
of the decrease. Selling, general and administrative ("SG&A") expenses increased
to $5.5  million  in the first  quarter  of 1999 from $4.6  million in the first
quarter of 1998. The increase was primarily due to higher bad debt provisions in
the first  quarter of 1999  relative  to the first  quarter  of 1998.  Excluding
provisions for bad debt, SG&A expenses increased less than $0.1 million (0.3%).

Interest and Other Income/Expense:

         Interest  income  decreased  $0.9 million in the first  quarter of 1999
relative to the first quarter of 1998 due to a lower average cash and short-term
investment  balance in the current year period.  Interest expense increased $0.5
million  primarily due to a higher average interest rate in the first quarter of
1999 compared to the first quarter of 1998.  Other income decreased $3.7 million
in the first quarter of 1999 compared to the first quarter of 1998. Other income
in first  quarter  1998  included a $3.1 million gain on the sale of vacant land
located in Milpitas, California.

Income Taxes:

         The Company's  income tax provision of  approximately  $0.4 million for
the first quarter of 1999 primarily represents foreign withholding taxes. No tax
provision was recorded in the first quarter of 1998. The Company's  wholly-owned
thin-film  media  operation,  Komag USA  (Malaysia)  Sdn.  ("KMS"),  received an
extension  of its initial  five-year  tax holiday for an  additional  five years
commencing  in July 1998.  KMS has also been  granted a ten-year tax holiday for
its second and third plant sites in Malaysia. The commencement date for this new
tax holiday has not been determined as of May 13, 1999.

Minority Interest in KMT/Equity in Net Income (Loss) of AKCL:

         The  minority  interest  in  the  net  income  (loss)  of  consolidated
subsidiary  represented  Kobe Steel USA Holdings Inc.'s ("Kobe USA's") 20% share
of Komag Material

                                      -14-

<PAGE>


Technology,  Inc.'s ("KMT's") net income (loss). KMT recorded net income of $1.3
million in the first  quarter of 1999 compared to a $0.5 million net loss in the
first quarter of 1998.

         The Company owns a 50% interest in AKCL and records its share of AKCL's
net  income  (loss) as  equity in net  income  (loss)  of  unconsolidated  joint
venture. The Company recorded a loss of $1.4 million as its equity in AKCL's net
loss for the first  quarter of 1999 compared to its equity in AKCL's net loss of
$9.4  million  recorded in the first  quarter of 1998.  The  Company's  share of
AKCL's loss for the first quarter of 1999 was limited to the Company's remaining
investment  balance in AKCL of $1.4  million.  The  Company  will not record its
share  of any  continuing  losses  at AKCL  as no  investment  balance  remains.
Assuming AKCL begins to report a net income in future periods,  the Company will
record its share of such income  only to the extent by which the income  exceeds
the  losses  incurred  subsequent  to the date on which the  investment  balance
became  zero.  AKCL's net loss for the first  quarter  of 1999 was $4.0  million
compared  to a net loss of $18.8  million in the first  quarter of 1998.  Higher
production  and sales  volumes in the first  quarter of 1999  accounted  for the
improved results.

Year 2000 Issue:

         Many computer systems were not designed to properly handle dates beyond
the year 1999.  Such systems were designed  using two digits rather than four to
define the  applicable  year.  Any computer  programs  that have  time-sensitive
software  may  recognize a date using "00" as the year 1900 rather than the year
2000.  This  could  result  in  a  system  failure  or  miscalculations  causing
disruptions  of  operations.  Disruptions  may also  occur if key  suppliers  or
customers  experience  disruptions in their ability to transact with the Company
due to Year 2000 issues.  The Company's  global  operations  rely heavily on the
infrastructures  of the countries in which it conducts  business.  The Year 2000
readiness within infrastructure  suppliers (utilities,  government agencies such
as customs, shipping organizations) will be critical to the Company's ability to
avoid  disruption of its operations.  The Company is working with industry trade
associations  to evaluate the Year 2000 readiness of  infrastructure  suppliers.
The Company has assessed its systems,  equipment  and processes and is currently
testing  these  systems to determine  the  Company's  Year 2000  readiness.  The
Company has committed  personnel and  resources to resolve  potential  Year 2000
issues and is working with key suppliers and customers to ensure their Year 2000
readiness.

         The  Company's  Year 2000 efforts are focused on three primary areas of
potential  impact:  internal  information  technology  ("IT") systems,  internal
non-IT  systems,  and the  readiness of third  parties with whom the Company has
critical  business  relationships.  Testing and  remediation  of internal IT and
non-IT systems is  approximately  60% complete.  The Company expects to complete
the testing and  remediation for these systems by July 31, 1999. The Company has
developed a process for  identifying  and assessing  Year 2000  readiness of its
critical suppliers. This process generally involves

                                      -15-

<PAGE>


the following steps:  initial supplier survey,  follow-up  supplier review,  and
contingency  planning.  The Company is following up with critical suppliers that
either did not respond  initially or whose  responses  were  unsatisfactory.  To
date,  the  Company  has  received  responses  from a majority  of its  critical
suppliers,  most of whom have responded that they expect to address all of their
significant Year 2000 issues on a timely basis.

         The Company  currently  believes that the remediation costs of the Year
2000 issue will not be  material  to the  Company's  results  of  operations  or
financial position.  Cumulatively  through May 10, 1999 the Company has incurred
remediation costs of approximately $0.1 million. The Company does not separately
track the  internal  costs  incurred for the Year 2000  project  (primarily  the
payroll cost for its  information  systems group).  While the Company  currently
expects that the Year 2000 issue will not pose significant operational problems,
delays in the implementation of new information  systems,  or a failure to fully
identify all Year 2000  dependencies in the Company's systems and in the systems
of its  suppliers,  customers  and  financial  institutions  could have material
adverse  consequences,  including  delays in the  delivery or sales of products.
Therefore, the Company is developing contingency plans for continuing operations
in  the  event  such  problems  arise.  The  Company  intends  to  complete  the
contingency planning phase of its Year 2000 readiness by July 31, 1999.

         The  Company is working to identify  and  analyze  the most  reasonably
likely  worst-case  scenarios  where it may be  affected  by Year  2000  related
interruptions.  These scenarios could include possible infrastructure  collapse,
the  failure  of power and water  supplies,  major  transportation  disruptions,
unforeseen  product  shortages  due to hoarding of material  and  supplies,  and
failures of  communications  and financial  systems.  Any one of these scenarios
could have a major and material  effect on the Company's  ability to produce and
deliver products to its customers.  While the Company is developing  contingency
plans to address issues under its control, an infrastructure  problem outside of
its control or some  combination  of several of these problems could result in a
delay in product shipments depending on the nature and severity of the problems.
The Company would expect that most utilities and service providers would be able
to restore service within days although more pervasive system problems involving
multiple  providers  could  last  several  weeks  or  longer  depending  on  the
complexity of the systems and the effectiveness of their contingency plans.

         The Company's  products are not date sensitive and the Company  expects
that it will have limited  exposure to product  liability  litigation  resulting
from Year 2000 related failures.  Disk drive manufacturers have generally stated
that disk drives as a stand-alone product are not date sensitive.  However, disk
drives using the Company's  thin-film media products have been incorporated into
computer systems which could experience Year 2000 related failures.  The Company
anticipates  that litigation may be brought  against  suppliers of all component
products of systems that are unable to properly handle Year 2000 issues.

                                      -16-

<PAGE>


Liquidity and Capital Resources:

         Cash and  short-term  investments  of $125.7  million at the end of the
first  quarter of 1999  decreased  $2.1 million from the end of the prior fiscal
year.  Working  Capital  decreased $4.1 million from the end of the prior fiscal
year.  Consolidated  operating  activities generated $6.2 million in cash during
the first  quarter  of 1999.  The  $21.5  million  operating  loss for the first
quarter of 1999, net of non-cash  depreciation charges of $23.8 million, and the
non-cash equity loss from AKCL of $1.4 million,  provided $3.7 million.  Changes
in operating  assets and  liabilities  provided  $1.9 million.  Improvements  in
operating cash flow were provided by reductions in inventory of $4.1 million and
in  prepaid  expenses  and  deposits  of $0.9  million.  Increases  in  accounts
receivable  and  reductions  in  accounts  payable  used $1.8  million  and $1.5
million,  respectively.  The Company spent $8.9 million on capital  requirements
during the first  quarter of 1999.  Sales of Common  Stock  under the  Company's
stock programs generated $0.3 million.

         Total  capital   expenditures   for  1999  are  currently   planned  at
approximately  $60 million.  Current  noncancellable  capital  commitments total
approximately $12 million.  The size of the Company's second quarter of 1998 net
loss has resulted in a default under certain  financial  covenants  contained in
the Company's  various bank credit  facilities.  The Company  currently has $260
million of  unsecured  bank  borrowings  outstanding.  No  additional  borrowing
capacity is available as a result of the technical  default.  The Company is not
in payment default under any of its credit facilities.  The Company is currently
negotiating  with its lenders for amendments to the existing credit  facilities.
If we successfully  amend or restructure  our credit  facilities we will seek to
have our auditors  reissue  their opinion  without the going concern  paragraph.
There  can be no  assurance  that  the  Company  will  be able  to  obtain  such
amendments to its credit  facilities on  commercially  reasonable  terms. If the
Company does not successfully amend these credit facilities,  it would remain in
technical  default of its bank loans and the lenders  would  retain their rights
and remedies under the existing credit agreements. As long as the lenders choose
not to accelerate any principal payments,  the Company would continue to operate
in default for the near term.  However,  the  Company  will likely need to raise
additional funds to restructure its debt obligations and to operate its business
for the long term.

         Over the next several years the Company will need  financial  resources
for capital  expenditures,  working  capital and research and  development.  The
Company  believes that in order to achieve its long-term  growth  objectives and
maintain  and  enhance  its  competitive  position,  such  additional  financial
resources  will be required.  There can be no assurance that the Company will be
able to secure such financial resources on commercially reasonable terms. If the
Company  is  unable  to  obtain  adequate  financing,  it could be  required  to
significantly  reduce  or  possibly  suspend  its  operations,  and/or  to  sell
additional  securities  on  terms  that  would be  highly  dilutive  to  current
stockholders.

                                      -17-

<PAGE>


PART II. OTHER INFORMATION

         ITEM 1. Legal Proceedings-Not Applicable.

         ITEM 2. Changes in Securities-Not Applicable.

         ITEM 3. Defaults Upon Senior Securities-

                  The size of the Company's  second quarter of 1998 net loss has
         resulted in a default under certain  financial  covenants  contained in
         the Company's various bank credit facilities. The Company currently has
         $260 million of unsecured bank  borrowings  outstanding.  No additional
         borrowing  capacity is available as a result of the technical  default.
         The  Company  is not  in  payment  default  under  any  of  its  credit
         facilities.  The Company is currently  negotiating with its lenders for
         amendments to the existing credit facilities.

         ITEM  4.  Submission  of  Matters  to a Vote  of  Security  Holders-Not
                   Applicable.

         ITEM 5. Other Information-Not Applicable.

         ITEM 6. Exhibits and Reports on Form 8-K

                  (a) Exhibit 27--Financial Data Schedule.

                  (b) On April 16,  1999 the Company  filed Form 8-K  containing
                      the  contents  of its press  release  dated  April 9, 1999
                      entitled  "Komag and Western  Digital  Complete  Strategic
                      Transaction for Disk Media Manufacturing".

                                      -18-

<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                               KOMAG, INCORPORATED
                                  (Registrant)


DATE:  May 14, 1999                 BY: /s/ William L. Potts, Jr. 
     ----------------                  ---------------------------
                                       William L. Potts, Jr.
                                       Senior Vice President and
                                       Chief Financial Officer



DATE:  May 14, 1999                 BY:  /s/ Stephen C. Johnson   
     ----------------                  ---------------------------
                                       Stephen C. Johnson
                                       President and
                                       Chief Executive Officer

                                      -19-