<PAGE>   1
                                  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 2, 2000
                         Commission File Number 0-16852



                               KOMAG, INCORPORATED
                                  (Registrant)



                      Incorporated in the State of Delaware
                I.R.S. Employer Identification Number 94-2914864
               1710 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 2, 2000, 65,901,892 shares of the Registrant's common stock, $0.01
    par value, were issued and outstanding.


<PAGE>   2

                                      INDEX

                               KOMAG, INCORPORATED

<TABLE>
<CAPTION>

                                                                                  Page No.
<S>              <C>                                                              <C>
    PART I.      FINANCIAL INFORMATION

    Item 1.      Consolidated Financial Statements (Unaudited)

                 Consolidated statements of operations--Three months
                 ended April 2, 2000 and April 4, 1999................................3

                 Consolidated balance sheets--April 2, 2000
                 and January 2, 2000..................................................4

                 Consolidated statements of cash flows--Three months
                 ended April 2, 2000 and April 4, 1999................................5

                 Notes to consolidated financial statements--
                 April 2, 2000.........................................................6-12

    Item 2.      Management's Discussion and Analysis of
                 Financial Condition and Results of Operations.........................13-20

    PART II.     OTHER INFORMATION

    Item 1.      Legal Proceedings.....................................................21

    Item 2.      Changes in Securities.................................................21

    Item 3.      Defaults Upon Senior Securities.......................................21

    Item 4.      Submission of Matters to a Vote of Security Holders...................21

    Item 5.      Other Information.....................................................21

    Item 6.      Exhibits and Reports on Form 8-K......................................21

    SIGNATURES.........................................................................22

</TABLE>

                                       -2-



<PAGE>   3
PART I.   FINANCIAL INFORMATION



                               KOMAG, INCORPORATED
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                         Three Months Ended
                                                                       -----------------------
                                                                        APR 2           Apr 4
                                                                         2000           1999
                                                                       --------       --------
<S>                                                                         <C>            <C>
Net sales to unrelated parties                                         $ 27,407       $ 90,013
Net sales to related party                                               52,226              -
                                                                       --------       --------
          NET SALES                                                      79,633         90,013

Cost of sales                                                            66,795         89,266
                                                                       --------       --------
          GROSS PROFIT                                                   12,838            747

Operating expenses:
     Research, development and engineering                                8,549         12,015
     Selling, general and administrative                                  3,645          5,478
     Amortization of intangibles                                          2,555              -
     Restructuring charges                                               (1,950)             -
                                                                       --------       --------
                                                                         12,799         17,493
                                                                       --------       --------
          OPERATING INCOME (LOSS)                                            39        (16,746)

Other income (expense):
     Interest income                                                        982          1,616
     Interest expense                                                    (6,451)        (5,004)
     Other, net                                                             375            661
                                                                       --------       --------
                                                                         (5,094)        (2,727)
                                                                       --------       --------
Loss before income taxes, minority interest,
   and equity in joint venture loss                                      (5,055)       (19,473)
Provision for income taxes                                                  376            400
                                                                       --------       --------
Loss before minority interest and equity in
   joint venture loss                                                    (5,431)       (19,873)
Minority interest in net income (loss) of consolidated subsidiary          (137)           251
Equity in net loss of unconsolidated joint venture                            -         (1,402)
                                                                       --------       --------
          NET LOSS                                                     $ (5,294)      $(21,526)
                                                                       ========       ========

Basic and diluted net loss per share                                   $  (0.08)      $  (0.40)
                                                                       ========       ========

Number of shares used in basic and diluted computation                   65,902         53,915
                                                                       ========       ========
</TABLE>



                 See notes to consolidated financial statements.

                                      -3-

<PAGE>   4

                               KOMAG, INCORPORATED
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)


<TABLE>
<CAPTION>

                                                                 APR 2             Jan 2
                                                                  2000             2000
                                                              -----------       -----------
ASSETS                                                        (UNAUDITED)         (note)
<S>                                                           <C>               <C>
Current Assets
       Cash and cash equivalents                              $    38,126       $    25,916
       Short-term investments                                      33,700            43,610
       Accounts receivable (including $26,477 and
        $25,971 due from related parties in 2000
        and 1999, respectively) less allowances
        of $2,490 in 2000 and $2,180 in 1999                       40,681            36,494
       Inventories:
           Raw materials                                            9,862             7,695
           Work-in-process                                          5,839             4,820
           Finished goods                                           6,161            10,503
                                                              -----------       -----------
                Total inventories                                  21,862            23,018
       Prepaid expenses and deposits                                1,135             3,254
       Income taxes receivable                                        815               815
       Deferred income taxes                                        3,767             3,767
                                                              -----------       -----------
                Total current assets                              140,086           136,874
Property, Plant and Equipment
       Land                                                         7,785             7,785
       Buildings                                                  134,471           134,471
       Equipment                                                  623,433           630,221
       Furniture                                                   10,980            10,980
       Leasehold improvements                                      31,714            36,656
                                                              -----------       -----------
                                                                  808,383           820,113
       Less allowances for depreciation and amortization         (513,074)         (506,658)
                                                              -----------       -----------
                Net property, plant and equipment                 295,309           313,455
Net Intangible Assets                                              20,441            22,996
Deposits and Other Assets                                           2,466             2,546
                                                              -----------       -----------
                                                              $   458,302       $   475,871
                                                              ===========       ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
       Current portion of long-term debt                      $   260,000       $   260,000
       Trade accounts payable                                      22,850            21,474
       Accounts payable to related parties                          2,257             2,019
       Accrued compensation and benefits                            9,993            10,048
       Other liabilities                                           17,392            19,615
       Income taxes payable                                            95               109
       Restructuring Liability                                     16,417            25,490
                                                              -----------       -----------
                Total current liabilities                         329,004           338,755
Note Payable to Related Party                                      21,186            21,186
Deferred Income Taxes                                              20,045            20,045
Other Long-term Liabilities                                        10,772            13,245
Minority Interest in Consolidated Subsidiary                        3,790             3,927
Stockholders' Equity
       Preferred stock                                                  -                 -
       Common stock                                                   659               659
       Additional paid-in capital                                 445,470           445,384
       Accumulated deficit                                       (373,203)         (367,909)
       Accumulated other comprehensive income                         579               579
                                                              -----------       -----------
                Total stockholders' equity                         73,505            78,713
                                                              -----------       -----------
                                                              $   458,302       $   475,871
                                                              ===========       ===========
</TABLE>


        Note:   The balance sheet at January 2, 2000 has been derived from the
                audited financial statements at that date.

                 See notes to consolidated financial statements.

                                      -4-
<PAGE>   5


                               KOMAG, INCORPORATED
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                      Three Months Ended
                                                                                   -----------------------
                                                                                    APR 2          Apr 4
                                                                                     2000           1999
                                                                                   --------       --------
OPERATING ACTIVITIES
<S>                                                                                <C>            <C>
      Net loss                                                                     $ (5,294)      $(21,526)
      Adjustments to reconcile net loss to net cash
          provided by operating activities:
            Depreciation and amortization                                            20,597         23,761
            Amortization of intangibles                                               2,555              -
            Provision for losses on accounts receivable                                 317             33
            Interest expense on note payable to related party                           950              -
            Equity in net loss of unconsolidated joint venture                            -          1,402
            (Gain) Loss on disposal of property, plant and equipment                    (96)           222
            Deferred rent                                                                63            148
            Minority interest in net income (loss) of consolidated subsidiary          (137)           251
            Changes in operating assets and liabilities:
                  Accounts receivable                                                (3,998)        (2,127)
                  Accounts receivable from related parties                             (506)           365
                  Inventories                                                         1,156          4,117
                  Prepaid expenses and deposits                                       2,119            879
                  Trade accounts payable                                              1,376         (1,459)
                  Accounts payable to related parties                                   238            (48)
                  Accrued compensation and benefits                                     (55)          (254)
                  Other liabilities                                                  (4,664)           439
                  Income taxes receivable/payable                                       (14)            11
                  Restructuring liability                                           (10,867)             -
                                                                                   --------       --------
                           Net cash provided by operating activities                  3,740          6,214

INVESTING ACTIVITIES
      Acquisition of property, plant and equipment                                   (2,452)        (8,915)
      Proceeds from short-term investments at maturity                                9,910          2,350
      Proceeds from disposal of property, plant and equipment                           846              -
      Deposits and other assets                                                          80            236
                                                                                   --------       --------
                         Net cash provided by (used in) investing activities          8,384         (6,329)

FINANCING ACTIVITIES
      Sale of Common Stock, net of issuance costs                                        86            318
                                                                                   --------       --------
                         Net cash provided by financing activities                       86            318

                      Increase in cash and cash equivalents                          12,210            203

      Cash and cash equivalents at beginning of year                                 25,916         64,467
                                                                                   --------       --------

                      Cash and cash equivalents at end of period                   $ 38,126       $ 64,670
                                                                                   ========       ========
</TABLE>


                 See notes to consolidated financial statements.

                                      -5-
<PAGE>   6


                               KOMAG, INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                  APRIL 2, 2000


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 considered
necessary for a fair presentation have been included. Operating results for the
three-month period ended April 2, 2000 are not necessarily indicative of the
results that may be expected for the year ending December 31, 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 2, 2000 included in the Company's Annual Report on Form 10-K
contained an explanatory paragraph which indicated substantial doubt about the
Company's ability to continue as a going concern because of cumulative operating
losses and lack of compliance with certain financial covenants of its various
bank agreements. Such non-compliance constitutes an 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 2, 2000 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 these 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>   7

      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 2, 2000.

      The Company uses a 52-53 week fiscal year ending on the Sunday closest to
December 31. The three-month reporting periods included in this report are
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:

<TABLE>
<CAPTION>



                                                     APR 2             Jan 2
(in thousands)                                         2000             2000
                                                   -----------      -----------
<S>                                                <C>              <C>
Municipal auction rate preferred stock             $    33,700      $    39,200
Corporate debt securities                               11,133            7,339
Mortgage-backed securities                              18,692           24,650
                                                   -----------      -----------
                                                   $    63,525      $    71,189
                                                   -----------      -----------

Amounts included in cash and cash equivalents      $    29,825      $    27,579
Amounts included in short-term investments              33,700           43,610
                                                   -----------      -----------
                                                   $    63,525      $    71,189
                                                   -----------      -----------
</TABLE>

      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 provisions of approximately $0.4 million for the
three-month period ended April 2, 2000 and April 4, 1999 represent foreign
withholding taxes on royalty and interest payments. The Company's wholly-owned
thin-film media operation, Komag USA (Malaysia) Sdn. ("KMS") received a
five-year extension of its initial tax holiday through June 2003 for its first
plant site. KMS has also been granted an additional ten-year tax holiday for its
second and third plant sites in Malaysia. The government determined in the third
quarter of 1999 that earnings from the second and third plant sites will be tax
free through 2001. The remaining period of the ten-year tax holiday will be
reassessed in 2001 based on achieving certain investment criteria.


                                      -7-
<PAGE>   8

NOTE 4 - COMPREHENSIVE LOSS

      Comprehensive loss for the three-month periods ended April 2, 2000 and
April 4, 1999 in the accompanying Consolidated Statements of Operations is the
same as the Company's net loss.

      Accumulated other comprehensive income at April 2, 2000 and January 2,
2000 in the accompanying Consolidated Balance Sheets consists entirely of
accumulated foreign currency translation adjustments.


NOTE 5 - RESTRUCTURING CHARGES

      During the third quarter of 1997, the Company evaluated the size of its
production capacity relative to market demand and implemented a restructuring
plan to close two older Milpitas, California facilities. The Company recorded a
$52.2 million restructuring charge which included $3.9 million for severance
costs associated with approximately 330 terminated employees (all in the U.S.
and predominately all from the manufacturing area), $33.0 million for the
write-down of the net book value of excess equipment that was scrapped and
disposed of 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.

      In the second quarter of 1998 several customers reduced orders for the
Company's products in response to downward adjustments in their disk drive
production build schedules. Due to the expectation that the media industry's
supply/demand imbalance would extend into 1999, the Company adjusted its
expectations for the utilization of its installed production capacity. Based on
this analysis of the Company's production capacity and its expectations of the
media market over the remaining life of the Company's fixed assets, the Company
concluded that it would not be able to recover the book value of those assets
based on projected undiscounted cash flows. As a result, the Company implemented
a restructuring plan in June 1998 that included a reduction in the Company's
U.S. and Malaysian workforce and the cessation of operations at its oldest San
Jose, California plant. The Company recorded a restructuring charge of $187.8
million which included $4.1 million for severance costs (approximately 170
employees, predominately in the U.S. and approximately 69%, 27% and 4% from the
manufacturing area, engineering area and sales, general and administrative area,
respectively), $5.9 million related to equipment order cancellations and other
equipment related costs, and $2.8 million for facility closure costs. The asset
impairment component of the charge was $175.0 million and effectively reduced
asset valuations to reflect the economic effect of recent industry price erosion
for disk media and the projected under-utilization of the Company's production
equipment and facilities. The fair value of these assets was


                                      -8-
<PAGE>   9

determined based upon the estimated future cash flows to be generated by the
assets, discounted at a market rate of interest (15.8%). The cash component of
the total charge was $12.8 million. Non-cash items in the
restructuring/impairment charge totaled $175.0 million.

      The Company incurred lower facility closure costs than anticipated in the
restructuring charges. The oldest Milpitas plant was sublet sooner than
anticipated and the Company reached a lease termination agreement with its
landlord on the second Milpitas plant in the third quarter of 1998. The Company
thereby avoided expected future rent payments and the cost of renovating the
facility to its original lease condition. Additionally, the Company determined
that it would not close its oldest San Jose, California facility at the
expiration of its lease. As a result the Company did not incur costs to restore
the facility to its original lease condition as contemplated in the
restructuring charge. Higher than expected costs for equipment order
cancellations offset the lower facility closure costs. A total of 515 employees
were terminated in the restructuring activities.

The following tables summarize the activity in the restructuring reserves during
the first quarter of 2000:


<TABLE>
<CAPTION>

1997 Restructuring Reserve
                                  Equipment Order
                                 Cancellations And
                                       Other
(in millions)                      Related Costs
                                 ------------------
<S>                <C>          <C>
Balance at January 2, 2000      $              1.8

Charged to Reserve                            (0.8)
                                ------------------
Balance at April 2, 2000        $              1.0
                                ==================


1998 Restructuring Reserve

                                 Equipment Order
                                Cancellations And
(in millions)                   Other Related Costs
                                -------------------
Balance at January 2, 2000      $              0.6

Charged to Reserve                              --
                                ------------------
Balance at April 2, 2000        $              0.6
                                ==================
</TABLE>



      At April 2, 2000, $1.6 million related to these restructuring activities
remained in current liabilities. The Company has made cash payments totaling
approximately $30.2

                                      -9-
<PAGE>   10

million primarily for severance, equipment order cancellations and facility
closure costs. The majority of the remaining liability, primarily for equipment
order cancellations, is expected to be settled through the use of cash by the
end of the second quarter of 2000.

      The Company recorded restructuring charges of $4.3 million in the second
quarter of 1999. This restructuring charge related to severance costs associated
with 400 terminated employees all in the U.S. and predominately all from the
manufacturing area. The entire $4.3 million was paid out to the employees during
the second and third quarter of 1999.

      During the third quarter of 1999, the Company implemented a restructuring
plan based on an evaluation of the size and location of its existing production
capacity relative to the short-term and long-term market demand outlook. Under
the 1999 restructuring plan, the Company decided to close its U.S. manufacturing
operations in San Jose, California. The restructuring actions resulted in a
charge of $139.3 million and included $98.5 million for leasehold improvements
and equipment write-offs, $17.7 million for future liabilities under
non-cancelable equipment leases associated with equipment no longer being used,
$15.6 million for severance pay associated with approximately 980 terminated
employees (all in the U.S. and predominately all from the manufacturing area),
and $7.5 million in plant closure costs. Non-cash items included in the
restructuring charge totaled approximately $98.5 million.

1999 Restructuring Reserve - Changes During First Quarter of 2000


<TABLE>
<CAPTION>

                               Liabilities Under
                                 Non-Cancelable         Facility
                                    Equipment            Closure       Severance
(in millions)                         Leases              Costs          Costs         Total
                                ------------------       -------       ---------       ------
<S>                             <C>                      <C>           <C>             <C>
Balance at January 2, 2000      $             13.8       $   4.5       $     4.8       $ 23.1

Adjustment to Reserve                           --          (2.0)             --         (2.0)
Charged to Reserve                            (2.6)         (0.2)           (3.5)        (6.3)
                                ------------------       -------       ---------       ------
Balance at April 2, 2000        $             11.2       $   2.3       $     1.3       $ 14.8
                                ==================       =======       =========       ======
</TABLE>



      At April 2, 2000, $14.8 million related to the 1999 restructuring
activities remained in current liabilities. During 1999 and the first quarter of
2000, the Company made cash payments totaling $28.3 million, primarily for
severance costs, payments for liabilities under non-cancelable equipment leases
and facility closure costs. Cash outflows of approximately $3.6 million
associated with severance pay and closure costs will occur primarily during the
second quarter of 2000. Cash payments of approximately $11.2 million under the
equipment leases will be made in monthly installments through mid-2002. The
facility closure liability was reduced by approximately $2.0 million in the
first

                                      -10-
<PAGE>   11

quarter of 2000 due to successfully terminating the leases on manufacturing
facilities and subleasing the administrative facility earlier than originally
expected.


NOTE 6 - 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.

<TABLE>
<CAPTION>

                                                 Three Months Ended
                                              -----------------------
                                                APR 2         Apr 4
                                                2000           1999
                                              --------       --------
<S>                                           <C>            <C>
(in thousands, except per share amounts)
Numerator:  Net loss                          $ (5,294)      $(21,526)
                                              --------       --------

Denominator for basic and diluted
      net loss per share -
      weighted-average shares                   65,902         53,915
                                              --------       --------


Basic and diluted net loss per share          $  (0.08)      $  (0.40)
                                              --------       --------

</TABLE>

      Incremental common shares attributable to the exercise of outstanding
options (assuming proceeds would be used to purchase treasury stock) of 461,954
and 2,077,738 for the three months ended April 2, 2000 and April 4, 1999,
respectively, were not included in the net loss per share computation because
the effect would be antidilutive.


NOTE 7 - 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 8 - LIABILITIES ASSOCIATED WITH PURCHASE

      In April 1999, the Company purchased the assets of Western Digital
Corporation's ("WDC") media operation. In conjunction with the purchase, under
purchase accounting rules, the Company recorded liabilities that increased the
amount


                                      -11-
<PAGE>   12

of goodwill recognized. These liabilities included estimated costs of $5.6
million for the closure of the former WDC media operation as well as costs of
$26.5 million related to the remaining lease obligations for equipment taken out
of service due to the closure and $4.7 million of costs for purchase order
cancellations and other costs.

      During 1999 and the first quarter of 2000, the Company paid a total of
approximately $17.9 million against liabilities arising from this transaction
including equipment lease obligations $(11.1 million), rent $(1.8 million),
property taxes $(1.3 million) and other liabilities $(3.7 million). Equipment
lease obligations are expected to be paid monthly through mid-2002. At April 2,
2000, the current portion of the equipment lease obligations was approximately
$9.2 million. The majority of the facility closure costs, purchase order
cancellation costs and other liabilities associated with the WDC transaction are
expected to be paid by mid-2000.


NOTE 9 - EQUITY

      In March 2000, the Company entered into an agreement with an institutional
investor to sell up to $20.0 million of common stock. The shares of common stock
will be sold pursuant to a private equity line of credit, under which the
Company may exercise "put options" to sell shares for a price equal to 90%, 92%
or 94% of market price depending on the level of the market price at the time of
exercise of the "put option". The shares may be sold periodically in maximum
increments of $1.5 million to $3.5 million over a period of up to thirty months.
Upon signing the agreement, the Company issued warrants to the investor to
acquire 80,000 shares of common stock at an exercise price of $4.6875 per share.
The warrants are exercisable during a three-year period beginning in September
2000.


NOTE 10 - SUBSEQUENT EVENT

      In April 2000, the Company entered into a definitive merger agreement with
HMT Technology Corporation (HMT). HMT designs, develops, manufactures and
markets high-performance thin-film disks. Under the terms of the definitive
merger agreement, each issued and outstanding share of HMT stock will be
converted into 0.9094 shares of the Company's common stock. The merger will be
accounted for under purchase accounting and is subject to customary closing
conditions, including regulatory approvals, the approval of both companies'
shareholders and the Company's lenders. The merger is expected to close in the
third quarter of calendar 2000.

                                      -12-
<PAGE>   13

                               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. The Company's
business is subject to a number of risks and uncertainties. While this
discussion represents the Company's current judgment on the risks facing it and
the future direction of its business, such risks and uncertainties could cause
actual results to differ materially from any future performance suggested
herein. In particular, the actions taken to restructure the Company's U.S.
operations might disrupt its ability to execute against customer obligations and
operational improvement plans. Such failures to execute would jeopardize the
anticipated improvements in the Company's financial performance. The Company
sells a single product into a market characterized by rapid technological change
and sudden shifts in the balance between supply and demand. Further, the Company
is dependent on a limited number of customers, some of whom also manufacture
some or most of their own disks internally. Due to the volume purchase agreement
with Western Digital Corporation ("WDC"), the Company's results continue to
remain highly dependent on the relative success of WDC in the data storage
market. Competition in the market, defined by both technology offerings and
pricing, can be fierce, especially during times of excess available capacity.
Such conditions were prevalent in 1997, 1998, 1999 and 2000. Other factors that
could cause actual results to differ are the following: changes in the industry
supply-demand relationship and related pricing for enterprise and desktop disk
products; timely and successful qualification of next-generation products;
utilization of manufacturing facilities; changes in manufacturing efficiencies,
in particular product yields and material input costs; extensibility of process
equipment to meet more stringent future product requirements; structural changes
within the disk media industry such as combinations, failures, and joint venture
arrangements; vertical integration and consolidation within the Company's
customer base; its dependence on a limited number of customers for sales;
increased competition; timely and successful deployment of new process
technologies into manufacturing; the availability of certain sole-sourced raw
material supplies and retention of key employees. In addition, the Company's
business requires substantial investments for research and development
activities and for physical assets such as equipment and facilities that are
dependent on its access to financial resources. The Company is currently in
default under certain financial covenants contained in its bank facilities and
it cannot assure you that it will be able to negotiate amendments to these
credit facilities on commercially reasonable terms. The Company's ability to
raise additional funding will be dependent upon improving its financial
performance as well as


                                      -13-
<PAGE>   14

the status of its credit facilities. 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 2, 2000 which was
filed on March 31, 2000. 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:

        Adverse market conditions, which began in mid-1997, continued to impact
the thin-film media market throughout 1998, 1999 and 2000. 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. 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, resulted in excess media production
capacity.

        In addition to adversities caused by the excess supply of media, 1998
was a year of transition for the Company and the disk drive industry to
advanced, magnetoresistive ("MR") media and recording heads. The transition to
MR disk drives led to unprecedented increases in areal density and, therefore,
the amount of data that can be stored on a single disk platter. Increased disk
storage capacity per disk allows drive manufacturers to offer lower-priced disk
drives through the incorporation of fewer components into their disk drives. The
rapid advancement in 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 result
in flat to declining disk demand in 2000. 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.
Despite the difficult market conditions, the Company believes that its recently
completed restructuring activities and the resulting lower manufacturing costs,
and technological advances such as 50 Gigabits per square inch recording density
and low-cost glass substrates, position the Company to be a successful
competitor.

        In April 1999, the Company purchased the assets of WDC's media
operation. Additionally, the Company and WDC signed a volume purchase agreement
under which the Company agreed to supply a substantial portion of WDC's media
needs over the next three years. Under the volume purchase agreement WDC began
to purchase most of its media requirements from the Company after the closing
date. Due to assimilation of the WDC media operation, the Company initially
expected that second quarter 1999 unit


                                      -14-
<PAGE>   15

sales from the combined operations would grow sequentially in the range of
20-35% compared to the Company's first quarter of 1999 results. However, in
response to competitive market conditions the Company's customers reduced the
number of disks per drive to support the delivery of lower priced disk drives to
the rapidly expanding, low-cost segment of the PC market. As a result, actual
unit shipments for the second quarter fell considerably short of these
expectations as customer order reductions (including those from WDC) and
lower-than-expected volumes on certain new product programs restricted
sequential unit sales growth to approximately 10%. These customer actions, the
continuing imbalance between the supply and demand for disk products, and the
lack of new data-intensive applications continue to depress the Company's
financial performance. Due to this weak unit demand the Company closed the
former WDC media operation at the end of June 1999, nearly fifteen months ahead
of the Company's original transition plan.

        Following the closure of the former WDC media operation at the end of
June 1999, the Company announced in July 1999 that it would reduce the size of
its U.S. operations further in response to the poor industry conditions. Later
in August 1999, the Company indicated that it would cease volume production of
finished disks in the U.S., close two manufacturing facilities in San Jose,
California, and institute staged work force reductions that would affect 980
people by the end of 1999. These reductions, combined with the June 1999 work
force reduction of 400 people, lowered the employment base at the Company's U.S.
operations from 1,950 people in April 1999 (subsequent to the acquisition of
WDC's media operation) to 539 people by the end of the first quarter of 2000. As
a result of these actions the Company expected to realize cash savings of
approximately $20 million per quarter in U.S. payroll costs. The Company
recorded a restructuring charge of $139.3 million in the third quarter of 1999
for the write-off of equipment and leasehold improvements in the U.S. production
facilities scheduled for closure and for severance pay related to the
reorganization of its U.S. operations.

        After completion of the phase out of volume production, the Company's
San Jose site is solely focused on activities related to research, process
development, and product prototyping. Selling, general and administrative
functions also remain in San Jose. The Company's highly automated substrate
manufacturing in Santa Rosa, California continues to produce low-cost aluminum
substrates and perform advanced development work for both aluminum and glass
substrates. The Company's shift of high volume production to its cost-advantaged
Malaysian manufacturing plants has improved the Company's overall cost
structure, resulted in lower unit production costs, and improved the Company's
ability to respond to the continuing price pressures in the disk industry.

 Revenue:

        Net sales decreased to $79.6 million in the first quarter of 2000, down
12% compared to $90.0 million in the first quarter of 1999. The year-over-year
decrease was primarily due to the net effect of a 19% decrease in the overall
average selling price and a


                                      -15-
<PAGE>   16

7% increase in unit sales volume. Net sales in the first quarters of 2000 and
1999 included $5.1 million and $3.8 million of substrate and single sided disk
sales, respectively. First quarter 2000 unit sales of finished media increased
to 10.8 million disks from 10.1 million disks in the first quarter of 1999. The
severe pricing pressures generated by the continuing imbalance in supply and
demand for thin-film media in the first quarter of 2000 resulted in the
year-over-year decrease in the overall average selling price.

       During the first quarter of 2000, sales to WDC and Maxtor Corporation
accounted for approximately 66% and 22%, respectively, of consolidated net
sales. Net sales to each of the Company's other customers were less than 10%
during the first quarter of 2000. The Company expects that it will continue to
derive a substantial portion of its sales from WDC and from a small number of
other 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. However, as a result of the April
1999 acquisition of WDC's media operation and related volume purchase agreement,
the Company's sales are expected to be highly dependent upon WDC's performance
in the disk drive industry.

Gross Margin:

       The Company recorded a gross margin of 16.1% in the first quarter of 2000
compared to a gross margin of 0.8% in the first quarter of 1999. The improvement
in the gross margin percentage was due to an increase in unit sales volume, a
decline of 14% in unyielded material and running costs per unit, and a reduction
of $18.6 million in fixed manufacturing costs. The Company produced 10.4 million
units in the first quarter of 2000 compared to 10.1 million units in the first
quarter of 1999. The positive effects were partially offset by the effect of the
19% decline in the average selling price.

Operating Expenses:

       Research and development ("R&D") expenses decreased to $8.5 million in
the first quarter of 2000 from $12.0 million in the first quarter of 1999.
Decreased R&D staffing and lower facility and equipment costs (primarily due to
the 1999 restructuring activities) accounted for most of the decrease in R&D
expenses. Selling, general and administrative ("SG&A") expenses decreased to
$3.6 million in the first quarter of 2000 from $ 5.5 million in the first
quarter of 1999. The decrease for the three-month period of 2000 relative to the
comparable period of 1999 was primarily due to lower payroll and related
employee costs (primarily due to the 1999 restructuring activities), partially
offset by an increase in bonus expense.

Restructuring Activities

        The Company recorded restructuring charges of $4.3 million in the second
quarter of 1999. This restructuring charge primarily related to severance pay
associated with 400 terminated employees (all in the U.S. and predominately all
from the manufacturing


                                      -16-
<PAGE>   17

area). The entire $4.3 million was paid out to the employees during the second
and third quarters of 1999.

       During the third quarter of 1999, the Company implemented a restructuring
plan based on an evaluation of the size and location of its existing production
capacity relative to the short-term and long-term market demand outlook. Under
the 1999 restructuring plan, the Company decided to close its U.S. manufacturing
operations in San Jose, California. The restructuring actions resulted in a
charge of $139.3 million and included $98.5 million for leasehold improvements
and equipment write-offs, $17.7 million for future liabilities under
non-cancelable equipment leases associated with equipment no longer being used,
$15.6 million for severance pay associated with approximately 980 terminated
employees (all in the U.S. and predominately all from the manufacturing area),
and $7.5 million in plant closure costs. Non-cash items included in the
restructuring charge totaled approximately $98.5 million.


        1999 Restructuring Reserve - Changes During First Quarter of 2000


<TABLE>
<CAPTION>

                               Liabilities Under
                                Non-Cancelable          Facility
                                   Equipment             Closure              Severance
(in millions)                       Leases                Costs                 Costs                Total
                                ---------------      ---------------       ---------------      ---------------
<S>                             <C>                  <C>                   <C>                  <C>
Balance at January 2, 2000      $          13.8      $           4.5       $           4.8      $          23.1

Adjustment to Reserve                        --                 (2.0)                   --                 (2.0)
Charged to Reserve                         (2.6)                (0.2)                 (3.5)                (6.3)
                                ---------------      ---------------       ---------------      ---------------
Balance at April 2, 2000        $          11.2      $           2.3       $           1.3      $          14.8
                                ===============      ===============       ===============      ===============
</TABLE>



      At April 2, 2000, $14.8 million related to the 1999 restructuring
activities remained in current liabilities. During 1999 and the first quarter of
2000, the Company made cash payments totaling $28.3 million. Cash outflows of
approximately $3.6 million associated with severance pay and closure costs will
occur primarily during the second quarter of 2000. Cash payments of
approximately $11.2 million under the equipment leases will be made in monthly
installments through mid-2002. The facility closure liability was reduced by
approximately $2.0 million in the first quarter of 2000 due to successfully
terminating the leases on manufacturing facilities and subleasing the
administrative facility earlier than originally expected.


Interest and Other Income/Expense:

        Interest income decreased $0.6 million in the first quarter of 2000
relative to the first quarter of 1999 due to lower average cash and short-term
investment balances in the current year period. Interest expense increased $1.4
million in the first quarter of 2000 compared to the first quarter of 1999. The
increase in interest expense was primarily due


                                      -17-
<PAGE>   18

to $1.0 million of interest expense on the Company's $21.2 million note payable
to WDC. Other income decreased $0.3 million in the first quarter of 2000
compared to the first quarter of 1999. The decrease was primarily due to a
reduction of $0.4 million in royalty income in the first quarter of 2000
compared to the first quarter of 1999.

Income Taxes:

       The Company's income tax provision was approximately $0.4 million for the
three-month periods of 2000 and 1999. The income tax provisions for both the
2000 and 1999 periods represent foreign withholding taxes on royalty and
interest payments. The Company's wholly-owned thin-film media operation, Komag
USA (Malaysia) Sdn. ("KMS"), received a five-year extention of its initial tax
holiday through June 2003 for its first plant site. KMS was granted an
additional ten-year tax holiday for its second and third plant sites in
Malaysia. The government has determined that earnings from the second and third
plant sites will be tax free through 2001. The remaining period of the ten-year
tax holiday will be reassessed in 2001 based on achieving certain investment
criteria.

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

       The minority interest in the net income 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 net loss
of $0.7 million and net income of $1.3 million in the first quarter of 2000 and
1999, respectively.

       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 in the first quarter of 1999 which reduced the Company's investment in AKCL
down to zero. During 1999 and the first quarter of 2000, the Company did not
record $2.6 million and $4.6 million in losses, respectively, as it would have
reduced the net book value of the investment in AKCL below zero. Assuming AKCL
reports 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.

Subsequent event:

        In April 2000, the Company entered into a definitive merger agreement
with HMT Technology Corporation (HMT). HMT designs, develops, manufactures and
markets high-performance thin-film disks. Under the terms of the definitive
merger agreement, each issued and outstanding share of HMT stock will be
converted into 0.9094 shares of the Company's common stock. The merger will be
accounted for under purchase accounting and is subject to customary closing
conditions, including regulatory approvals, the approval of both companies'
shareholders and the Company's lenders. The merger is expected to close in the
third quarter of calendar 2000.


                                      -18-
<PAGE>   19

LIQUIDITY AND CAPITAL RESOURCES:

       Cash and short-term investments of $71.8 million at the end of the first
quarter of 2000 increased $2.3 million from the end of the prior fiscal year.
Working capital increased $13.0 million from the end of the prior fiscal year.
Consolidated operating activities provided $3.7 million in cash during the first
three months of 2000. The $5.3 million net loss for the first three months of
2000, net of the non-cash depreciation and amortization charges of $23.2
million, and other non-cash charges totaling $1.1 million, provided $19.0
million of cash. Changes in operating assets and liabilities used $15.2 million
of cash. Accounts receivable increased $4.5 million (due to an increase in sales
and the timing of sales in the first quarter of 2000 compared to the fourth
quarter of 1999) and other liabilities decreased $4.7 million (primarily due to
cash payments for liabilities associated with the purchase of the assets of
WDC's media operation), consuming cash. The net change in the restructuring
liability for the first three months of 2000 used $10.9 million of cash. The
restructuring liability was created due to the restructuring charges recorded in
1997, 1998 and 1999. In addition, the net change in the other operating assets
and liabilities provided $4.9 million of cash. The Company spent $2.5 million on
capital requirements during the first three months of 2000 and other investing
activities provided $0.9 million in cash. Sales of Common Stock under the
Company's stock programs generated $0.1 million.

       Current noncancellable capital commitments as of April 2, 2000 total
approximately $2.9 million. Total capital expenditures for 2000 are currently
planned at approximately $20.0 million. The 2000 capital spending plan primarily
includes costs for projects designed to improve yield and productivity as well
as costs for the installation of certain production equipment transferred from
the closed U.S. manufacturing plant to Malaysia.

       The Company is in default under certain financial covenants contained in
the Company's bank credit facilities which include the following ratios/tests:
profitability, quick ratio, leverage ratio, tangible net worth, debt coverage,
and debt to capitalization. The Company is not in payment default under these
credit facilities as all interest charges and fees associated with these
facilities have been paid on their scheduled due dates. At the time of the
covenant default the Company had $260.0 million of debt outstanding against a
total borrowing capacity of $345.0 million under the various senior unsecured
credit facilities. As a result of the covenant default, in December 1998, the
Company's lenders withdrew the $85.0 million in unused borrowing capacity. To
date, the lenders have not accelerated any principal payments under the credit
facilities.

        The Company is currently negotiating with its lenders for amendments to
the 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. If the Company does not successfully amend these credit
facilities, it would remain in technical



                                      -19-
<PAGE>   20

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.

       In March 2000, the Company entered into an agreement with an
institutional investor to sell up to $20.0 million of common stock. The shares
of common stock will be sold pursuant to a private equity line of credit, under
which the Company may exercise "put options" to sell shares for a price equal to
90%, 92% or 94% of market depending on the level of the actual market price at
the time of exercise of the "put option". The shares may be sold periodically in
maximum increments of $1.5 million to $3.5 million over a period of up to thirty
months. Upon signing the agreement, the Company issued warrants to the investor
to acquire 80,000 shares of common stock at an exercise price of $4.6875 per
share. The warrants are exercisable during a three-year period beginning in
September 2000.

       Over the next several years the Company will need financial resources for
capital expenditures, working capital and research and development. In 2000, the
Company plans to spend approximately $20.0 million on property, plant and
equipment. 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.


                                      -20-
<PAGE>   21

PART II. OTHER INFORMATION

        ITEM 1. Legal Proceedings-Not Applicable.

        ITEM 2. Changes in Securities-Not Applicable.

        ITEM 3. Defaults Upon Senior Securities-

               Cumulative losses incurred by the Company has resulted in a
        default under certain financial covenants contained in the Company's
        various bank credit facilities. The Company currently has $260.0 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) Exhibits

               Exhibit 2.1 Agreement and Plan of Reorganization By and Among
                           Komag, Incorporated, KHM, Inc. and HMT Technology
                           Corp.
               Exhibit 10.21--Private Equity Line of Credit Agreement
               Exhibit 27--Financial Data Schedule.

               b) Reports on Form 8-K

               On March 20, 1999 the Company filed Form 8-K containing the
               contents of its press release dated March 16, 2000 entitled
               "Komag Announces Strong Q1 Shipments, Revises Upward Fourth
               Quarter 1999 Financial Results".

                                      -21-
<PAGE>   22

                                   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 4, 2000                  BY:  /s/ Thian Hoo Tan
     ------------------------          -------------------------------
                                    Thian Hoo Tan
                                    President and
                                    Chief Executive Officer

DATE:  May 4, 2000                  BY: /s/ Edward H. Siegler
     ------------------------          -------------------------------
                                    Edward H. Siegler
                                    Vice President,
                                    Chief Financial Officer

DATE:  May 4, 2000                  BY: /s/ Kathleen A. Bayless
     ------------------------          -------------------------------
                                    Kathleen A. Bayless
                                    Vice President,
                                    Corporate Controller


                                      -22-
<PAGE>   23

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No.         Description
-----------         -----------
<S>                 <C>
Exhibit  2.1        Agreement and Plan of Reorganization By and Among Komag,
                    Incorporated, KHM, Inc. and HMT Technology Corp.

Exhibit 10.21       Private Equity Line of Credit Agreement

Exhibit 27          Financial Data Schedule
</TABLE>