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 March 30, 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 March 30, 1997, 51,897,255 shares of the Registrant's common stock, $0.01 par
value, were issued and outstanding.

<PAGE>



                                      INDEX

                               KOMAG, INCORPORATED

                                                                        Page No.

     PART I.        FINANCIAL INFORMATION

     Item 1.        Consolidated Financial Statements (Unaudited)

                    Consolidated statements of income--Three months
                    ended March 30, 1997, and March 31, 1996. . . . . . . . .  3

                    Consolidated balance sheets--March 30, 1997,
                    and December 29, 1996 . . . . . . . . . . . . . . . . . .  4

                    Consolidated statements of cash flows--Three months
                    ended March 30, 1997, and March 31, 1996. . . . . . . . .  5

                    Notes to consolidated financial statements--
                    March 30, 1997 . . . . . . . . . . . . . . . . . . . . . 6-8

     Item 2.        Management's Discussion and Analysis of
                    Financial Condition and Results of Operations  . . . . .9-13

     PART II.       OTHER INFORMATION

     Item 1.        Legal Proceedings . . . . . . . . . . . . . . . . . . . . 14

     Item 2.        Changes in Securities . . . . . . . . . . . . . . . . . . 14

     Item 3.        Defaults Upon Senior Securities . . . . . . . . . . . . . 14

     Item 4.        Submission of Matters to a Vote of Security Holders . . . 14

     Item 5.        Other Information . . . . . . . . . . . . . . . . . . . . 14

     Item 6.        Exhibits and Reports on Form 8-K . . . . . . . . . . . .  14

     SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15


                                       -2-

<PAGE>
PART I. FINANCIAL INFORMATION
<TABLE>

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

                                                                Three Months Ended
                                                             -----------------------
                                                               March 30     March 31
                                                                 1997        1996              
                                                             ---------    ---------

<S>                                                          <C>          <C>      
Net sales                                                    $ 167,242    $ 152,839
Cost of sales                                                  127,927       88,350
                                                             ---------    ---------
      GROSS PROFIT                                              39,315       64,489

Operating expenses:
   Research, development and engineering                        12,013        6,648
   Selling, general and administrative                          10,145       10,818
                                                             ---------    ---------
                                                                22,158       17,466
                                                             ---------    ---------
      OPERATING INCOME                                          17,157       47,023

Other income (expense):
  Interest income                                                1,185        2,282
  Interest expense                                              (1,467)        (106)
  Other, net                                                       687           58
                                                             ---------    ---------
                                                                   405        2,234
                                                             ---------    ---------
Income before income taxes, minority interest,
 and equity in joint venture income                             17,562       49,257
Provision for income taxes                                       2,986       10,839
                                                             ---------    ---------
Income before minority interest and equity in
 joint venture income                                           14,576       38,418
Minority interest in net income of consolidated subsidiary         182          180
Equity in net income of unconsolidated joint venture             3,405        4,266
                                                             ---------    ---------
     NET INCOME                                              $  17,799    $  42,504
                                                             =========    =========

Net income per share                                         $    0.33    $    0.80
                                                             =========    =========

Number of shares used in per share computation                  53,906       53,093
                                                             =========    =========
<FN>

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

                                       -3-
<PAGE>
<TABLE>

                              KOMAG, INCORPORATED
                          CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)
<CAPTION>
                                                               March 30    December 29
                                                                   1997           1996
                                                            -----------    -----------
                                                            (unaudited)       (note)
<S>                                                         <C>            <C>        
ASSETS
Current Assets
     Cash and cash equivalents                              $    93,774    $    90,741
     Short-term investments                                      16,735          2,500
     Accounts receivable less allowances of
          $3,018 in 1997 and $3,087 in 1996                      72,645         55,676
     Accounts receivable from related parties                    13,613          8,449
     Inventories:
          Raw materials                                          28,401         33,734
          Work-in-process                                        24,068         21,774
          Finished goods                                          9,163          6,452
                                                            -----------    -----------
               Total inventories                                 61,632         61,960
     Prepaid expenses and deposits                                7,051         16,192
     Deferred income taxes                                       15,579         15,579
                                                            -----------    -----------
               Total current assets                             281,029        251,097
Investment in Unconsolidated Joint Venture                       40,068         39,754
Property, Plant and Equipment
     Land                                                         9,367          9,367
     Building                                                   109,552        110,991
     Equipment                                                  725,952        673,210
     Furniture                                                   10,747          7,754
     Leasehold Improvements                                     144,304        131,737
                                                            -----------    -----------
                                                                999,922        933,059
     Less allowances for depreciation and amortization         (317,296)      (289,353)
                                                            -----------    -----------
               Net property, plant and equipment                682,626        643,706
Deposits and Other Assets                                         3,936          3,800
                                                            -----------    -----------
                                                            $ 1,007,659    $   938,357
                                                            ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
     Trade accounts payable                                 $    52,853    $    80,089
     Accounts payable to related parties                          4,722          3,294
     Accrued compensation and benefits                           19,869         21,835
     Other liabilities                                            3,282          1,913
     Income taxes payable                                         4,017          1,824
                                                            -----------    -----------
                Total current liabilities                        84,743        108,955
Long-term Debt                                                  145,000         70,000
Deferred Income Taxes                                            57,806         57,806
Other Long-term Liabilities                                         620            497
Minority Interest in Consolidated Subsidiary                      3,341          3,159
Stockholders' Equity
     Preferred stock                                                 --             --
     Common stock                                                   519            517
     Additional paid-in capital                                 390,269        388,305
     Retained earnings                                          321,378        303,579
     Accumulated foreign currency translation adjustments         3,983          5,539
                                                            -----------    -----------
                Total stockholders' equity                      716,149        697,940
                                                            -----------    -----------
                                                            $ 1,007,659    $   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>

                                       -4-


<PAGE>
<TABLE>

                              KOMAG, INCORPORATED
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                  (Unaudited)
<CAPTION>
                                                                     Three Months Ended
                                                                    --------------------
                                                                    March 30    March 31
                                                                        1997        1996
                                                                    --------    --------
<S>                                                                 <C>         <C>     
OPERATING ACTIVITIES
    Net income                                                      $ 17,799    $ 42,504
    Adjustments to reconcile net income to net cash
      provided by operating activities:
       Depreciation and amortization                                  28,576      17,931
       Provision for losses on accounts receivable                     1,034        (324)
       Equity in net income of unconsolidated joint venture           (3,405)     (4,266)
       (Gain)/loss on disposal of equipment                              (79)        127
       Deferred rent                                                     123          16
       Minority interest in net income of consolidated subsidiary        182         180
       Changes in operating assets and liabilities:
           Accounts receivable                                       (18,003)      7,823
           Accounts receivable from related parties                   (5,164)     (2,541)
           Inventories                                                   328     (10,242)
           Prepaid expenses and deposits                                (860)       (678)
           Trade accounts payable                                    (27,236)     11,609
           Accounts payable to related parties                         1,428      (4,473)
           Accrued compensation and benefits                          (1,966)    (11,616)
           Other liabilities                                           1,369        (550)
           Income taxes payable                                       12,194       1,376
                                                                    --------    --------
                 Net cash provided by operating activities             6,320      46,876

INVESTING ACTIVITIES
    Acquisition of property, plant and equipment                     (67,560)    (64,390)
    Purchases of short-term investments                              (14,235)       (163)
    Proceeds from short-term investments at maturity                    --        46,688
    Proceeds from disposal of equipment                                  327          20
    Deposits and other assets                                           (320)       (270)
    Dividend distribution from unconsolidated joint venture            1,535        --
                                                                    --------    --------
                 Net cash used in investing activities               (80,253)    (18,115)

FINANCING ACTIVITIES
    Increase in long-term obligations                                 75,000        --
    Sale of Common Stock, net of issuance costs                        1,966       1,305
    Distribution to minority interest holder                            --          (279)
                                                                    --------    --------
                 Net cash provided by financing activities            76,966       1,026

               Increase in cash and cash equivalents                   3,033      29,787
    Cash and cash equivalents at beginning of year                    90,741      14,879
                                                                    --------    --------
               Cash and cash equivalents at end of period           $ 93,774    $ 44,666
                                                                    ========    ========
<FN>
                See notes to consolidated financial statements.
</FN>
</TABLE>
                                       -5-
<PAGE>

                               KOMAG, INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                 MARCH 30, 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-month period ended March 30, 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-month  reporting  periods for the  comparable  years
included in this report are each comprised of thirteen weeks.

                                       -6-

<PAGE>

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:




                                                          Mar 30          Dec 29
(in thousands)                                              1997            1996
                                                      ----------       ---------
Corporate debt securities                                $70,560         $55,618
Mortgage-backed securities                                39,353          35,699
Municipal auction rate preferred stock                    16,735           2,500
                                                      ----------       ---------
                                                        $126,648         $93,817
                                                      ==========       =========
                                                      
                                                                 
Amounts included in cash and cash equivalents           $109,913         $91,317
Amounts included in short-term investments                16,735           2,500
                                                      ----------       ---------
                                                        $126,648         $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 estimated annual effective income tax rate for 1997 of 17% is lower
than the 1997  combined  federal and state  statutory  rate of 41% and unchanged
from the effective  income tax rate for 1996 of 17%. The difference  between the
effective  tax rate  and the  combined  statutory  rate is  primarily  due to an
initial  five-year  tax  holiday  (commencing  in July  1993) for the  Company's
wholly-owned  thin-film  media  operation,  Komag USA (Malaysia)  Sdn.  ("KMS").
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 yet commenced at March 30, 1997.


NOTE 4 - TERM DEBT AND LINES OF CREDIT

         In February 1997, the Company  increased its total credit facilities to
$265,000,000 through the addition of a new five-year $75,000,000 term loan and a
$15,000,000  increase in an existing credit  facility.  The term loan expires in
2002. The Company has drawn down $145,000,000 under these facilities.

                                       -7-
<PAGE>


NOTE 5 - EARNINGS PER SHARE

         In February  1997,  the  Financial  Accounting  Standards  Board issued
Statement No. 128, "Earnings per Share",  which the Company is required to adopt
for its fiscal year ending  December 29, 1997. At that time, the Company will be
required to change the method  currently used to compute  earnings per share and
to restate all prior periods. Under the new requirements for calculating primary
earnings per share,  the dilutive effect of stock options will be excluded.  The
impact is expected to result in an  increase in primary  earnings  per share for
the first quarter ended March 30, 1997 and March 31, 1996 of $0.01 and $0.04 per
share,  respectively.  The  Company  has not yet  determined  what the impact of
Statement 128 will be on the calculation of fully diluted earnings per share.



                                       -8-
<PAGE>


                               KOMAG, INCORPORATED

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


Results of Operations:

         The  following  discussion  contains  predictions,  estimates and other
forward-looking  statements  that  involve a number of risks and  uncertainties.
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:  the
rate of improvement in manufacturing efficiencies on magnetoresistive ("MR") and
proximity-inductive products; utilization of manufacturing facilities;  industry
supply-demand   relationship  and  related  pricing  for  high-end  desktop  and
enterprise  disk products;  vertical  integration and  consolidation  within the
Company's limited customer base; increased competition; extensibility of process
equipment  to  meet  more  stringent   future  product   requirements;   product
transitions to next-generation  products;  availability of certain  sole-sourced
raw material  supplies;  execution of planned capacity  additions;  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.

Revenue

         Net sales of thin-film  media increased 9% in the first quarter of 1997
relative  to the first  quarter of 1996.  The net effect of a higher  unit sales
volume and a slight  decrease in the overall  average  selling price resulted in
the increased net sales. 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.  The Company began a rapid
transition  to  new  magnetoresistive  ("MR")  and  proximity-inductive  product
offerings in the second half of 1996. Sales of these products  increased rapidly
and accounted for 76% of unit sales in the first quarter of 1997.  The effect of
the sales mix shift to these new higher-priced,  next-generation products offset
most of the effect of price  reductions on maturing  inductive disk products and
resulted in only a slight decrease in the overall average selling price.

         In addition to sales of internally produced disk products,  the Company
resells  products  manufactured by its Japanese joint venture,  Asahi Komag Co.,
Ltd.  (AKCL).  Distribution  sales of thin-film media  manufactured by AKCL were
$2.7 million in the first quarter of 1997

                                       -9-
<PAGE>

compared to $0.3 million in the first quarter of 1996. The Company  expects that
distribution  sales of AKCL  product  will  remain  at a  relatively  low  level
throughout 1997.

         During the first quarter of 1997 three customers individually accounted
for at least ten percent of consolidated  net sales:  Seagate  Technology,  Inc.
(31%), Western Digital Corporation (26%) and Quantum Corporation,  together with
its Japanese manufacturing partner,  Matsushita-Kotobuki Electronics Industries,
Ltd.  ("MKE")  (22%).  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.

         Unit production increased approximately 6% in the first quarter of 1997
relative to the first 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).
The combination of  substantially  lower yields for new products and a reduction
in  equipment  utilization  largely  offset  the  effects of a 22%  increase  in
physical  capacity in the first quarter of 1997 relative to the first quarter of
1996. Sputtering cycle times improved slightly between the periods. In the first
quarter of 1996, the Company was primarily  producing  mature product  offerings
with stable,  higher yield and utilization  rates.  Production of the new MR and
proximity product families began in the last half of 1996 at substantially lower
yields.  Additionally,  increased  development  time  for  these  new  products,
incurred on manufacturing  machines,  resulted in lower manufacturing  equipment
utilization rates.

         The  Company  increased  unit  output  in the  first  quarter  of  1997
approximately  16% relative to the fourth quarter of 1996. The higher sequential
output was primarily due to an increase in  manufacturing  yields and production
capacity.  Equipment  utilization also rose slightly on a sequential  basis. The
Company expects another strong  sequential  increase in production output in the
second  quarter of 1997 as a result of further  yield gains and the  addition of
two new  production  lines.  One of  these  lines  will be the  Company's  first
higher-throughput  new design ("ND") sputtering  machine. A second ND production
line is expected  to be added in Penang in the second half of 1997.  The rate of
quarter-to-quarter growth in unit production during the second half of 1997 will
depend, in large measure,  on the achievement of further yield gains, the levels
of  equipment  utilization  and  throughput,  and  the  effectiveness  of the ND
sputtering machines. Given the timing of planned capacity additions and expected
productivity  improvements,  the growth  rate in  quarterly  production  output,
measured  on a  percentage  basis from the prior  quarter,  will slow during the
second half of 1997.


                                      -10-
<PAGE>

Gross Margin

         The gross margin percentage for the first quarter of 1997 was 24%, down
significantly  from the 42%  gross  margin  percentage  achieved  for the  first
quarter of 1996. Lower  manufacturing  yields and reduced equipment  utilization
rates in the  first  quarter  of 1997  relative  to the first  quarter  of 1996,
combined  with  inherently  higher  product  costs  for the new MR and  advanced
proximity disks,  resulted in the lower gross margin  percentage.  Sequentially,
the  Company's  gross  margin  improved  from the 12%  gross  margin  percentage
achieved for the fourth quarter of 1996. The Company anticipates that additional
manufacturing   yield  improvements   should  result  in  further  gross  margin
improvement in the second  quarter of 1997. The Company  believes that yield and
utilization  gains  will  be  necessary  to  achieve  the  Company's  previously
announced, second half of 1997, targeted gross margin range of 30-35%.

Operating Expenses

         Research and development  ("R&D") expenses increased 81% ($5.4 million)
in the first quarter of 1997 relative to the first quarter of 1996. In the first
quarter  of 1997 the  Company  completed  construction  of an R&D  facility  and
installed a sputtering  line  devoted  exclusively  to R&D efforts.  The Company
expects  to  fully  test and  develop  new  products  and  processes  on the R&D
sputtering  line  prior to their  introduction  into  manufacturing.  Use of the
dedicated  R&D  sputtering  line for  large-scale  pilot  production  runs  will
eventually minimize the use of existing manufacturing  production lines for this
purpose.  Relocation  costs related to the move to the new  facility,  including
costs to move and install existing R&D equipment, amounted to approximately $2.1
million in the first quarter of 1997. The remaining increase resulted from costs
for increased  R&D staffing and higher costs  related to the new  facility.  The
Company  expects to increase R&D spending to  approximately  $50 million in 1997
from $29  million  in 1996.  Costs  for the new  facility,  sputtering  line and
additional staffing account for the planned increase.

         Selling,   general  and  administrative   ("SG&A")  expenses  decreased
approximately  6% ($0.7  million) in the first  quarter of 1997  relative to the
first quarter of 1996.  The Company's  provisions  for bonus and profit  sharing
programs  decreased  $2.4 million  between the comparable  three-month  periods.
Provisions for bad debt increased  $1.4 million  between the periods.  Excluding
provisions  for bad debt and the Company's  bonus and profit  sharing  programs,
SG&A expenses increased $0.3 million.

         Interest  and  Other  Income/Expense  Interest  income  decreased  $1.1
million in the first quarter of 1997 relative to the first quarter of 1996.  The
decrease is  primarily  due to a lower  average cash and  short-term  investment
balance in the current year period.  Interest expense  increased $1.4 million in
the

                                      -11-
<PAGE>

first  quarter  of 1997  compared  to the first  quarter  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 in
the first quarter of 1996. Other income increased  approximately $0.6 million in
the first quarter of 1997 compared to the first quarter of 1996. Other income in
the first quarter of 1997 included  approximately $0.8 million of royalty income
from AKCL for sales made by AKCL outside of Japan.  No such royalty was received
in the first quarter of 1996.

Income Taxes

         The estimated annual effective income tax rate for 1997 of 17% is lower
than the 1997  combined  federal and state  statutory  rate of 41% and unchanged
from the effective  income tax rate for 1996 of 17%. The difference  between the
effective  tax rate  and the  combined  statutory  rate is  primarily  due to an
initial  five-year  tax  holiday  (commencing  in July  1993) for the  Company's
wholly-owned  thin-film  media  operation,  Komag USA (Malaysia)  Sdn.  ("KMS").
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 yet commenced at March 30, 1997.

Minority  Interest in KMT/Equity in Net Income 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.  KMT recorded net income of
$0.9 million in the first quarter of both 1997 and 1996.

         The Company records 50% of AKCL's net income as equity in net income of
unconsolidated  joint  venture.  AKCL reported net income of $6.8 million in the
first  quarter of 1997,  down from $8.6 million in the first quarter of 1996. In
the  first  quarter  of  1997,   AKCL  sold  its  entire   interest  in  Headway
Technologies,  Inc.  ("Headway")  for $10.8  million and recorded a gain of $5.3
million (net of tax). In contrast,  AKCL's results for the first quarter of 1996
included  a  writedown  of $1.0  million  (net of tax)  related  to its  Headway
investment.  Excluding the Headway  items,  AKCL's net income  decreased to $1.5
million in the first  quarter of 1997 from $9.6 million in the first  quarter of
1996.  Higher costs and lower  yields  related to the  transition  to new MR and
advanced proximity products dampened AKCL's results in the first quarter of 1997
relative  to the  first  quarter  of 1996.  While  AKCL's  manufacturing  yields
improved  sequentially  in the first quarter of 1997 from the fourth  quarter of
1996,  product  qualification  issues at AKCL will most  likely  cause the joint
venture's operating  performance to decline  sequentially  between the first and
second quarters of 1997.

                                      -12-
<PAGE>


         As a result of the expected decline in AKCL's operating performance and
without the  positive  effect of the one-time  investment  gain,  AKCL's  equity
contribution  to the  Company  is  expected  to be  sharply  lower and  possibly
negative in the second quarter of 1997.


Liquidity and Capital Resources:

         Cash and  short-term  investments  of $110.5  million at the end of the
first quarter of 1997  increased  $17.3 million from the end of the prior fiscal
year.  Consolidated  operating  activities generated $6.3 million in cash during
the first  three-month  period of 1997. The Company borrowed $75.0 million under
its credit facilities and spent $67.6 million on capital requirements during the
first quarter of 1997.  Sales of Common Stock under the  Company's  stock option
program and a dividend  received  from AKCL during  this period  generated  $2.0
million and $1.5 million,  respectively.

         Total  capital   expenditures   for  1997  are  currently   planned  at
approximately  $290 million.  The 1997 capital  spending plan includes  costs to
equip the  Company's  two newest back end  manufacturing  facilities  in Penang,
Malaysia and San Jose,  California.  Additionally,  the plan  includes  costs to
complete and equip the Company's  188,000  square foot research and  development
facility and 82,000 square foot administration  facility, which were occupied in
February and March 1997, respectively.

         Current  noncancellable  capital  commitments total  approximately $125
million.  The Company believes that in order to achieve its long-term  expansion
objectives  and  maintain  and enhance its  competitive  position,  it will need
additional financing for capital expenditures, working capital, and research and
development.  The  Company  believes  that it will  be  able  to fund  its  1997
expenditures  through a combination  of cash generated  from  operations,  funds
available  from  existing  bank lines of credit,  and  existing  cash  balances.
However,  the Company may obtain  additional debt or equity financing in 1997 to
maintain  adequate cash reserves.  If the Company is unable to obtain sufficient
capital it could be required to reduce its capital  equipment  and  research and
development  expenditures  which  could  have a material  adverse  effect on the
Company's results of operations.



                                      -13-
<PAGE>


  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 27-Financial Data Schedule

                   (b)    Not Applicable




                                      -14-


<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:   April 28, 1997               BY:  /s/ William L. Potts, Jr.
    ------------------                    --------------------------------------
                                             William L. Potts, Jr.
                                             Senior Vice President and
                                             Chief Financial Officer

DATE:   April 28, 1997                BY: /s/ Stephen C. Johnson
     -----------------                    --------------------------------------
                                              Stephen C. Johnson
                                              President and
                                              Chief Executive Officer



                                      -15-