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 September 28, 1997
                         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 September 28, 1997, 52,488,107 shares of the Registrant's common stock, $0.01
par value, were issued and outstanding.

<PAGE>












Part 1.  Financial Information
Item 1.   Financial Statements
                              KOMAG, INCORPORATED
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In Thousands, except per share data)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                          Three Months Ended   Nine Months Ended
                                         -------------------  -------------------
                                         Sept. 28, Sept. 29,  Sept. 28, Sept. 29,
                                         1997      1996       1997      1996
                                         --------- ---------  --------- ---------
<S>                                      <C>       <C>        <C>       <C>
Net sales                                $129,694  $131,533   $472,057  $436,580
Cost of sales                             129,492    99,948    396,879   277,550
                                         --------- ---------  --------- ---------
      GROSS PROFIT                            202    31,585     75,178   159,030
                                         --------- ---------  --------- ---------
Operating expenses:
   Research, development and engineering   13,118     7,849     36,457    21,508
   Selling, general and administrative      3,913     6,789     21,663    28,863
   Restructuring charge                    52,157        --     52,157        --
                                         --------- ---------  --------- ---------
                                           69,188    14,638    110,277    50,371
                                         --------- ---------  --------- ---------
      OPERATING INCOME (LOSS)             (68,986)   16,947    (35,099)  108,659
                                         --------- ---------  --------- ---------
Other income (expense):
  Interest income                           1,159     1,388      3,773     5,526
  Interest expense                         (2,541)     (112)    (6,513)     (327)
  Other, net                                1,077     1,594      1,681     1,511
                                         --------- ---------  --------- ---------
                                             (305)    2,870     (1,059)    6,710
                                         --------- ---------  --------- ---------
Income (loss) before income taxes,
 minority interest, and equity in
 joint venture income (loss)              (69,291)   19,817    (36,158)  115,369
Provision (benefit) for income taxes      (20,411)    3,961    (14,778)   23,074
                                         --------- ---------  --------- ---------
Income (loss) before minority interest
 and equity in joint venture income
 (loss)                                   (48,880)   15,856    (21,380)   92,295
Minority interest in net income
 (loss) of consolidated subsidiary             (6)      148        363       450
Equity in net income (loss) of
 unconsolidated joint venture              (3,874)      790     (1,529)    9,717
                                         --------- ---------  --------- ---------
     NET INCOME (LOSS)                   ($52,748)  $16,498   ($23,272) $101,562
                                         ========= =========  ========= =========
Net income (loss) per share                ($1.01)    $0.31     ($0.45)    $1.91
                                         ========= =========  ========= =========
Number of shares used in per
 share computation                         52,399    53,035     52,101    53,165
                                         ========= =========  ========= =========
<FN>
                 See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>

                              KOMAG, INCORPORATED
                          CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                   September 28,  December 29,
                                                   1997           1996
                                                   -------------  -------------
                                                    (unaudited)      (note)
<S>                                                <C>            <C>
ASSETS
Current Assets
     Cash and cash equivalents                          $45,308        $90,741
     Short-term investments                              24,400          2,500
     Accounts receivable less allowances of
          $3,104 in 1997 and $3,087 in 1996              60,177         55,676
     Accounts receivable from related parties             6,345          8,449
     Inventories:
          Raw materials                                  35,402         33,734
          Work-in-process                                17,554         21,774
          Finished goods                                 21,648          6,452
                                                   -------------  -------------
               Total inventories                         74,604         61,960
     Prepaid expenses and deposits                        4,620          2,866
     Income taxes receivable                             13,387         13,326
     Deferred income taxes                               15,579         15,579
                                                   -------------  -------------
               Total current assets                     244,420        251,097
Investment in Unconsolidated Joint Venture               36,376         39,754
Property, Plant and Equipment
     Land                                                 9,368          9,367
     Building                                           114,060        110,991
     Equipment                                          792,844        673,210
     Furniture                                           12,012          7,754
     Leasehold improvements                             149,350        131,737
                                                   -------------  -------------
                                                      1,077,634        933,059
     Less allowances for depreciation and
        amortization                                   (403,204)      (289,353)
                                                   -------------  -------------
               Net property, plant and equipment        674,430        643,706
Deposits and Other Assets                                 3,688          3,800
                                                   -------------  -------------
                                                       $958,914       $938,357
                                                   =============  =============






LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
     Trade accounts payable                             $28,335        $80,089
     Accounts payable to related parties                  3,297          3,294
     Accrued compensation and benefits                   16,812         21,835
     Other liabilities                                    3,957          1,913
     Income taxes payable                                    44          1,824
     Restructuring liability                             16,521            --
                                                   -------------  -------------
                Total current liabilities                68,966        108,955
Long-term Debt                                          145,000         70,000
Deferred Income Taxes                                    57,806         57,806
Other Long-term Liabilities                                 860            497
Minority Interest in Consolidated Subsidiary              3,522          3,159
Stockholders' Equity
     Preferred stock                                        --             --
     Common stock                                           525            517
     Additional paid-in capital                         396,702        388,305
     Retained earnings                                  280,307        303,579
     Accumulated foreign currency translation
        adjustments                                       5,226          5,539
                                                   -------------  -------------
                Total stockholders' equity              682,760        697,940
                                                   -------------  -------------
                                                       $958,914       $938,357
                                                   =============  =============
<FN>
Note:   The balance sheet at December 29, 1996 has been derived from the
        audited financial statements at that date.

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






















                              KOMAG, INCORPORATED
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                             Nine Months Ended
                                                        ------------------------
                                                        Sept. 28,    Sept. 29,
                                                        1997         1996
                                                        -----------  -----------
<S>                                                     <C>          <C>
OPERATING ACTIVITIES
    Net income (loss)                                     ($23,272)    $101,562
    Adjustments to reconcile net income (loss) to
      net cash provided by operating activities:
       Depreciation and amortization                        96,035       60,920
       Provision for losses on accounts receivable              42           52
       Equity in net (income) loss of unconsolidated
           joint venture                                     1,530       (9,717)
       Loss on disposal of equipment                         1,260           49
       Non-cash portion of restructing charge related
         to write-off of property, plant and equipment      33,013           --
       Deferred rent                                           363          (55)
       Minority interest in net income of
           consolidated subsidiary                             363          450
       Changes in operating assets and liabilities:
           Accounts receivable                              (4,543)      11,794
           Accounts receivable from related parties          2,104       (2,187)
           Inventories                                     (12,644)     (30,962)
           Prepaid expenses and deposits                    (1,754)        (743)
           Trade accounts payable                          (51,754)      13,967
           Accounts payable to related parties                   3       (1,639)
           Accrued compensation and benefits                (5,023)      (8,707)
           Other liabilities                                 2,044          210
           Income taxes payable (receivable)                (1,841)       8,082
           Restructuring liability                          16,521           --
                                                        -----------  -----------
               Net cash provided by operating
                   activities                               52,447      143,076
                                                        -----------  -----------
INVESTING ACTIVITIES
    Acquisition of property, plant and equipment          (160,976)    (261,199)
    Purchases of short-term investments                    (21,900)        (163)
    Proceeds from short-term investments at maturity            --      137,862
    Proceeds from disposal of equipment                        497        1,607
    Deposits and other assets                                 (441)        (420)
    Dividend distribution from unconsolidated joint
         venture                                             1,535           --
                                                        -----------  -----------
               Net cash used in investing
                   activities                             (181,285)    (122,313)
                                                        -----------  -----------
FINANCING ACTIVITIES
    Increase in long-term obligations                       75,000           --
    Sale of Common Stock, net of issuance costs              8,405        6,483
    Distribution to minority interest holder                    --         (279)
                                                        -----------  -----------
               Net cash provided by financing
                   activities                               83,405        6,204
                                                        -----------  -----------
    Increase (decrease) in cash and cash equivalents       (45,433)      26,967
    Cash and cash equivalents at beginning of year          90,741       14,879
                                                        -----------  -----------
    Cash and cash equivalents at end of period             $45,308      $41,846
                                                        ===========  ===========
<FN>
                 See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>










































                               KOMAG, INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                               SEPTEMBER 28, 1997


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- and nine-month periods 
ended September 28, 1997 are not necessarily indicative of the results 
that may be expected for the year ending December 28, 1997.

     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 December 29, 1996.

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


 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:


                                                September 28, December 29,
                                                    1997          1996
(in thousands)                                  ------------- -------------

Corporate debt securities                             $9,549       $55,618
Mortgage-backed securities                            34,197        35,699
Municipal auction rate preferred stock                24,400         2,500
                                                ------------- -------------
                                                     $68,146       $93,817
                                                ============= =============


Amounts included in cash and cash equivalents        $43,746       $91,317
Amounts included in short-term investments            24,400         2,500
                                                ------------- -------------
                                                     $68,146       $93,817
                                                ============= =============

     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 tax provision for the first nine months of 1997 represents tax 
loss carrybacks associated with the Company's U.S. operations. The 
Company's wholly-owned thin-film media operation Komag USA (Malaysia) 
Sdn. ("KMS") operates under an initial five-year tax holiday which 
commenced in July 1993.  Assuming KMS fulfills certain commitments under 
its license to operate within Malaysia, this initial tax holiday may be 
extended for an additional five-year period by the Malaysian government.  
KMS has also been granted a ten-year tax holiday for its second and 
third plant sites in Malaysia.  This new tax holiday has not commenced 
as of September 28, 1997.


NOTE 4 - TERM DEBT AND LINES OF CREDIT

        In June 1997, the Company amended an existing line of credit 
facility.  The amended agreement increased the Company's total credit 
facilities to $345,000,000.  At September 28, 1997, a total of 
$200,000,000 was available for additional borrowings under these credit 
facilities.  Loan availability is subject to compliance with certain 
financial covenants, including limitations on the number of sequential 
quarterly losses.


NOTE 5 - RESTRUCTURING CHARGE 

During the third quarter of 1997 the Company undertook an 
evaluation of the size and location of its existing production capacity 
relative to the short-term market demand outlook.  Based upon this 
evaluation the Company implemented a restructuring plan in August 1997.  
Under the restructuring plan, the Company will consolidate its U.S. 
manufacturing operations onto its new campus in San Jose, California and 
close two older factories in Milpitas, California.  The smaller of the 
two Milpitas factories was closed at the end of the third quarter of 
1997 and the second factory is scheduled to close by the end of the 
second quarter of 1998. Over time the Company expects that its Malaysian 
manufacturing operations will account for an increasing portion of the 
Company's production output. By the end of 1998 the Company anticipates 
that approximately three-quarters of its disk output will be produced at 
the Malaysian manufacturing facilities, up from approximately 50% 
currently.  These facilities are closer to customers' disk drive 
assembly plants in Southeast Asia and enjoy certain cost and tax 
advantages over the Company's U.S. manufacturing facilities.  

The planned restructuring actions resulted in a charge of $52.2 
million and included reducing headcount, vacating leased facilities, 
consolidating operations and disposing of assets. The restructuring 
charge included $3.9 million for severance costs associated with 
terminated employees, $33.0 million for the write-off of the net book 
value of equipment and leasehold improvements, $10.1 million related to 
equipment order cancellations and other equipment related costs and $5.2 
million for facility closure costs.  Non-cash items included in the 
restructuring charge totaled approximately $33.0 million. At September 
29, 1997, $16.5 million related to the restructuring activities remained 
in current liabilities. 

        The restructuring provisions were established and approved by the 
Company's executive management and its Board of Directors.  Actual 
restructuring costs are recognized as reductions in the restructuring 
liability in the period incurred.


NOTE 6 - EARNINGS (LOSS) PER SHARE

        In February 1997, the Financial Accounting Standards Board issued 
Statement No. 128 (FAS 128), "Earnings per Share", which the Company is 
required to adopt for its fiscal year ending December 28, 1997.  At that 
time, the Company will be required to change the method currently used 
to compute earnings (loss) per share and to restate all prior periods.  
Under the new requirements for calculating primary earnings (loss) per 
share, the dilutive effect of stock options will be excluded.  
Application of  FAS 128 is expected to have no impact on primary 
earnings (loss) per share for the three- and nine-month periods ended 
September 28, 1997 nor for the three-month period ended September 29, 
1996.  Earnings per share for the nine-month period ended September 29, 
1996 will increase by $0.08 per share.  The calculation of diluted 
earnings per share does not differ materially from the Company's 
reported primary earnings per share.



                               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.  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.  Factors that could cause actual 
results to differ include the following: industry supply-demand 
relationship and related pricing for high-end desktop and enterprise 
disk products; successful product qualification of next-generation 
products; utilization of manufacturing facilities; rate of improvement 
in manufacturing efficiencies on magnetoresistive ("MR") products; 
extensibility of process equipment to meet more stringent future product 
requirements; availability of sufficient cash resources; vertical 
integration and consolidation within the Company's limited customer 
base; increased competition; availability of certain sole-sourced raw 
material supplies; and the risk factors listed in the Company's Form 10-
K filed in March 1997.  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.

Overview 
        Results for the first nine-months of 1997 were dramatically lower 
than the first nine-months of 1996.  Entering 1996 the Company was 
producing mature product offerings at high yields with full utilization 
of its capacity and strong demand for these products.  Gross margins 
exceeding 40% in both the first and second quarters of 1996 were at 
near-record levels for the Company.  In the third quarter of 1996, the 
Company began a rapid transition to MR and proximity-inductive thin-film 
media products. Manufacturing yields for these products were 
substantially below the high yields achieved during the first half of 
1996. Additionally, the Company devoted significant portions of its 
manufacturing capacity to development efforts for the new products. As a 
result of these low yield and equipment utilization rates, the Company's 
sales in the second half of 1996 were production constrained and 
declined from the levels during the first half of the year. 
Furthermore, an increasing mix of the low yielding new products led to
a sequential decline in gross margin  percentages in the second half of
1996.  The gross margin percentage for  the third and fourth quarters
of 1996 were 24.0% and 11.7%,  respectively.

        Net sales increased sequentially during the first two quarters of 
1997, primarily due to manufacturing capacity additions, but fell 
sharply in the third quarter of 1997 as an excess supply of enterprise-
class disk drives caused drive manufacturers to reduce their build plans 
for this class of drives.   The Company's net sales and gross margin 
decreased sharply to $129.7 million and 0.2%, respectively, in the third 
quarter of 1997, down sequentially from $175.1 million and 20.4%, 
respectively.  Lower unit production volumes in the third quarter of 
1997, coupled with the high fixed cost structure of the Company's 
business, increased unit production costs.  Additionally, write-downs 
for excess supplies of certain inventories further depressed the third 
quarter's gross margin percentage.

        During the third quarter of 1997 the Company undertook an 
evaluation of the size and location of its existing production capacity 
relative to the short-term market demand outlook.  Based upon this 
evaluation the Company implemented a restructuring plan in August 1997.  
Under the restructuring plan, the Company will consolidate its U.S. 
manufacturing operations onto its new campus in San Jose, California and 
close two older factories in Milpitas, California.  The smaller of the 
two Milpitas factories was closed at the end of the third quarter of 
1997 and the second factory is scheduled to close by the end of the 
second quarter of 1998. Over time the Company expects that its Malaysian 
manufacturing operations will account for an increasing portion of the 
Company's production output. By the end of 1998 the Company anticipates 
that approximately three-quarters of its disk output will be produced at 
the Malaysian manufacturing facilities, up from approximately 50% 
currently.  These facilities are closer to customers' disk drive 
assembly plants in Southeast Asia and enjoy certain cost and tax 
advantages over the Company's U.S. manufacturing facilities.  

        The Company anticipates that net sales for the fourth quarter of 
1997 will rebound substantially relative to the third quarter of 1997 
due in large measure to increased order volume for desktop media 
products.  Disk sales into the enterprise market during the fourth 
quarter will remain well below the Company's historical levels due to 
the anticipated slow recovery of this segment.  During the third quarter 
several customers qualified the Company's latest advanced disk offerings 
that permit recording densities of 1.5 gigabits ("Gb") per square inch 
and above, the equivalent of 2 gigabytes ("GB") of information on a 3 
1/2 inch disk platter.  These drive programs entered volume production 
late in the third quarter.  The Company is in the process of qualifying 
this  class of disk products into other disk drive programs.  Such
additional  qualifications, if successful, could positively influence
fourth quarter  results but will more likely affect results in the
first two quarters of  1998.


Revenue
        Net sales decreased 1% in the third quarter of 1997 relative to 
the third quarter of 1996. The decrease was primarily due to a decrease 
in unit volume. The overall average unit selling price was relatively 
unchanged between the comparable three-month periods.  The overall 
average selling price typically strengthens only as the result of 
product transitions to higher-priced, more technologically advanced 
product offerings.  Price reductions for individual product offerings 
are characteristic of the thin-film media industry.  Sales of the new MR 
and proximity-inductive products, which began in the last half of 1996, 
increased rapidly and accounted for nearly all unit sales in the third 
quarter of 1997.  The effect of the sales mix shift to these new higher-
priced, next-generation products more than offset the effect of price 
reductions on individual product offerings and resulted in the flat 
overall average selling price.  Net sales in the third quarter of 1997 
and third quarter of 1996 included $1.8 million and $1.5 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.

        Net sales increased 8% in the first nine-months of 1997 relative 
to the first nine-months of 1996 primarily due to an increase in unit 
sales volume. Excluding substrate disk sales of $3.7 million in the 
first nine months of 1997 and $6.8 million in the first nine months of 
1996, net sales of thin-film media increased approximately 9%.  The 
increase was almost entirely due to a higher unit sales volume in the 
first three quarters of 1997.  The overall average selling price 
increased less than 1% between the periods.  The sales mix shift to 
higher-priced MR and proximity-inductive products described in the 
quarterly comparison more than offset the effect of price reductions on 
individual product offerings and resulted in the slight increase in the 
overall average selling price.

        In addition to sales of internally produced disk products, the 
Company has historically resold products manufactured by its Japanese 
joint venture, Asahi Komag Co., Ltd. (AKCL).  Distribution sales of 
thin-film media manufactured by AKCL were $1.7 million in both the third 
quarter of 1997 and third quarter of 1996. Distribution sales of thin-
film media manufactured by AKCL were $4.5 million in the first nine 
months of 1997 compared to $3.8 million in the first nine months of 
1996.  The Company expects that distribution sales of AKCL product will 
remain at a relatively low level throughout 1997.

        During the third quarter of 1997 three customers accounted for 
nearly 90% of consolidated net sales: Western Digital Corporation (50%), 
Maxtor Corporation (25%), and International Business Machines ("IBM") 
(14%). 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 the customers.  The Company's customer 
mix shifted dramatically in the third quarter of 1997 as a result of the 
reduction in enterprise-class disk drive production by the Company's 
customers.  In the third quarter of 1997 Quantum Corporation, together 
with its Japanese contract manufacturing partner, Matsushita-Kotobuki 
Electronics Industries, Ltd. ("MKE") and Seagate Technology, Inc. 
collectively accounted for less than ten percent of the Company's net 
sales. The Company's disk sales to these customers were primarily 
incorporated into enterprise-class disk drives.  These two customers 
collectively accounted for 35% of net sales in the second quarter of 
1997.  

        Unit production increased 22% in the third quarter of 1997 
relative to the third quarter of 1996. Increased production volume 
typically occurs due to increased physical capacity (additional 
sputtering lines) and/or improvements in manufacturing efficiencies 
(improved production throughput from higher yields, better equipment 
utilization, and shorter process cycle times).  In the third quarter of 
1997 relative to the third quarter of 1996, the increased unit 
production volume was primarily due to the addition of physical 
capacity.  Higher production throughput achieved through shorter process 
cycle times was largely offset by lower equipment utilization rates.  
The Company operated below capacity in the third quarter of 1997 as a 
result of weak market demand for enterprise-class disk products. 
Manufacturing yields improved slightly between the comparable three-
month periods.  

        Unit production volume increased approximately 11% in the first 
nine months of 1997 compared to the first nine months of 1996.  The net 
effect of a 21% increase in unit production capacity, coupled with an 
improvement in process cycle times, outpaced decreases in manufacturing 
yield and utilization rates during the comparable nine-month periods.  
Lower manufacturing yields occurred as a result of the product 
transition to MR and advanced proximity-inductive media.  Product 
transition issues and the third quarter 1997 weakness in market demand 
for enterprise-class disk products were the primary contributors to the 
lower utilization rates.  

        The Company expects to exit 1998 with a production capacity of 20 
million disks per quarter after closure of the Company's two Milpitas, 
California plants. When fully equipped, the Company currently believes 
that its remaining manufacturing facilities in  the U.S. and Malaysia
will have the capacity to manufacture  approximately 115 million disks
per year.  The Company's U.S. and  Malaysian factories produced
approximately 49 million disks in 1996 and  41 million disks during the
first three quarters of 1997.

Gross Margin
        The gross margin percentage for the third quarter of 1997 was 
0.2%, compared to 24.0% for the third quarter of 1996.  The gross margin 
percentage for the first nine months of 1997 was 15.9%, down from 36.4% 
for the first nine months of 1996.  The substantial decreases in the 
gross margin percentages between the comparable nine-month periods were 
primarily attributable to a combination of lower manufacturing yields, 
reduced equipment utilization rates and inherently higher product 
material and processing costs for MR and advanced proximity disks. 
Additionally, the Company incurred inventory write-downs of $10.8 
million and $18.5 million in the third quarter and first nine months of 
1997, respectively.  Inventory write-downs were not significant in the 
third quarter and first nine months of 1996. 

        The Company expects that gross margins should improve but will 
likely remain under pressure during the fourth quarter of 1997 and 
throughout the first half of 1998 until the Company's restructuring plan 
becomes fully implemented in the second half of 1998.  

Operating Expenses
        Research and development ("R&D") expenses increased 67% ($5.3 
million) and 70% ($14.9 million) in the three- and nine-month periods of 
1997 relative to the comparable periods of 1996.  The Company occupied a 
newly constructed 188,000 square-foot R&D facility in the first quarter 
of 1997. Costs for the new facility and increased R&D staffing accounted 
for the increases between the three- and nine-month periods of 1997 and 
the comparable periods of 1996.  The Company expects to increase R&D 
spending by 70% to approximately $50 million in 1997 from $29 million in 
1996 primarily due to additional facility, equipment and staffing costs.

        Selling, general and administrative ("SG&A") expenses decreased 
approximately 42% ($2.9 million) in the third quarter of 1997 relative 
to the third quarter of 1996.  Lower provisions for bonus and profit 
sharing programs (decrease of $2.9 million) and lower provisions for bad 
debt (decrease of $0.4 million) resulted in the overall decrease in SG&A 
expenses between the quarters.  Excluding provisions for bonus and 
profit sharing programs and provisions for bad debt, SG&A expenses 
increased $0.4 million. The higher spending was primarily due to 
increased payroll-related costs.  SG&A expenses decreased 25% ($7.2 
million) in the first nine months of 1997 compared to the first nine 
months of 1996 primarily due to a $9.3 million reduction in bonus and 
profit sharing provisions.  Provisions for bad debt increased $0.2 
million in the first nine months of 1997 compared to the first nine 
months of 1996. Excluding provisions for bonus and  profit sharing
programs and provisions for bad debt, SG&A expenses  increased $2.0
million due mainly to higher payroll and facility-related  costs.  The
Company occupied a newly constructed administration facility  in March
1997.  

        The Company implemented a restructuring plan for its U.S. 
manufacturing operations in the third quarter of 1997 and recorded a 
restructuring charge of $52.2 million.  The restructuring charge 
included $3.9 million for severance costs associated with terminated 
employees, $33.0 million for the write-off of the net book value of 
equipment and leasehold improvements, $10.1 million related to equipment 
order cancellations and other equipment related costs and $5.2 million 
for facility closure costs.  Non-cash items included in the 
restructuring charge totaled approximately $33.0 million.  

Interest and Other Income/Expense
        Interest income decreased $0.2 million in the third quarter of 
1997 relative to the third quarter of 1996 and $1.8 million in the first 
nine months of 1997 relative to the first nine months of 1996.  The 
decreases were due to lower average cash and short-term investment 
balances in the current year periods.  Interest expense increased $2.4 
million in the third quarter of 1997 compared to the third quarter of 
1996 and $6.2 million in the first nine months of 1997 relative to the 
first nine months of 1996.  The Company borrowed $145.0 million under 
its credit facilities between the beginning of December 1996 and the end 
of March 1997.  The Company had no outstanding debt during the first 
nine months of 1996.  

        Other income decreased $0.5 million in the third quarter of 1997 
compared to the third quarter of 1996. Other income in the third quarter 
of 1997 included increased gains on foreign currency transactions ($1.0 
million), higher losses on the disposal of property, plant and equipment 
($0.4 million), reduced royalty income from AKCL for sales made by AKCL 
outside of Japan ($0.6 million) and increases in other miscellaneous 
expenses ($0.5 million). Other income increased $0.2 million in the 
first nine months of 1997 relative to the first nine months of 1996. 
Other income in the first nine months of 1997 included increased gains 
on foreign currency transactions ($1.2 million), higher losses on the 
disposal of property, plant and equipment ($1.2 million), increased 
royalty income from AKCL for sales made by AKCL outside of Japan ($0.7 
million) and increases in other miscellaneous expenses ($0.5 million). 

Income Taxes
        The tax provision for the first nine months of 1997 represents tax 
loss carrybacks associated with the Company's U.S. operations. The 
Company's wholly-owned thin-film media operation Komag USA (Malaysia) 
Sdn. ("KMS") operates under an initial five-year tax holiday which 
commenced in July 1993.  Assuming KMS fulfills certain commitments under 
its license to operate within Malaysia, this initial tax holiday may be 
extended for an additional five-year period by the Malaysian government.  
KMS has also been granted a ten-year tax holiday for its second and 
third plant sites in Malaysia.  This new tax holiday has not commenced 
as of September 28, 1997.       

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 Technology, Inc.'s ("KMT's") net income 
(loss).  KMT recorded a minimal net loss in the third quarter of 1997 
and net income of $0.9 million in the third quarter of 1996.  KMT 
recorded net income of $1.8 million and $2.3 million in the first nine 
months of 1997 and 1996, respectively.

        The Company records 50% of AKCL's net income (loss) as equity in 
net income (loss) of unconsolidated joint venture.  AKCL reported a net 
loss of $7.7 million in the third quarter of 1997, substantially worse 
than the net income of $1.6 million incurred in the third quarter of 
1996.  AKCL reported a net loss of $3.1 million in the first nine months 
of 1997 compared to a net income of $19.4 million in the first nine 
months of 1996.  Results for the first nine months of 1997 included a 
$5.3 million (net of tax) gain on AKCL's March 1997 sale of its 
investment in Headway Technologies, Inc.  Excluding the gain, AKCL 
incurred a net loss of $8.4 million in the first nine months of 1997. 

        AKCL was primarily producing mature inductive products with more 
stable, higher yields in the third quarter and first nine months of 
1996.  Product transition issues related to AKCL's qualification and 
production of MR products adversely affected both the third quarter and 
first nine months of 1997.  AKCL operated substantially under capacity 
in the third quarter of 1997 and the Company anticipates that AKCL will 
continue to underutilize its capacity through at least the end of 1997. 
AKCL's equity contribution is expected to remain negative but could show 
some improvement over the third quarter's result. AKCL is currently in 
the process of qualifying MR products with customers.  Assuming AKCL 
successfully qualifies for new drive programs, volume production and 
shipments into those programs are not expected to begin until at least 
the first quarter of 1998. 

Liquidity and Capital Resources:

        Cash and short-term investments of $69.7 million at the end of the 
third quarter of 1997 decreased $23.5 million from the end of the prior 
fiscal year. Consolidated operating activities generated $52.4 million 
in cash during the first nine months of 1997.  The Company borrowed 
$75.0 million under its credit facilities and spent $161.0 million on 
capital requirements during the first nine months of 1997. Sales of 
Common Stock under the Company's stock option and employee stock 
purchase programs generated $8.4 million.  Additionally, the Company 
received a $1.5 million cash dividend from AKCL.

        Total capital expenditures for 1997 were previously planned at 
approximately $290 million, and included expenditures for additional 
production capacity, equipment upgrades, facility expansions, and R&D 
equipment.  The Company has reevaluated its capital plan.  Based on this 
review the Company currently expects capital expenditures to approximate 
$200 million to $220 million for 1997.  The Company will focus 
expenditures primarily on projects that improve process capabilities and 
support an increasing MR product mix. 

        Current noncancellable capital commitments total approximately $95 
million.  The Company currently has $200 million available under its 
$345 million unsecured, multi-year bank lines of credit. The 
availability of funds under these lines of credit is subject to 
compliance with certain financial covenants, including limitations on 
the number of sequential quarterly losses.  The Company believes that 
the reduction in capital spending and the completion of the Company's 
restructuring plan are necessary to ensure that the Company maintains 
adequate cash reserves through 1998.  



  PART II. OTHER INFORMATION

             ITEM 1. Legal Proceedings-Not Applicable.

             ITEM 2. Changes in Securities-Not Applicable.

             ITEM 3. Defaults Upon Senior Securities-Not Applicable.

             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 10.24-First Amendment to Amended and
                           Restated  Credit Agreement dated October 9,
                           1997  Among Komag, Incorporated and
                           BankBoston,  N.A. as Agent.


                          Exhibit 27-Financial Data Schedule

                   (b)    Not Applicable


















<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:   November 7, 1997           BY:  /s/ William L. Potts, Jr.
       -----------------              --------------------------------------
                                             William L. Potts, Jr.
                                             Senior Vice President and
                                             Chief Financial Officer

DATE:   November 7, 1997           BY: /s/ Stephen C. Johnson
        -----------------             --------------------------------------
                                              Stephen C. Johnson
                                              President and
                                              Chief Executive Officer