SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                            ------------------------
                                   FORM 10-Q

    (MARK ONE)
[ X ]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
    SECURITIES EXCHANGE ACT OF 1934

    FOR THE QUARTERLY PERIOD ENDED  MARCH 29, 1997

                                       OR

[     ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
    SECURITIES EXCHANGE ACT OF 1934

    FOR THE TRANSITION PERIOD FROM             TO
                                   -----------    ------------

                          COMMISSION FILE NO. 0-13941
                       ---------------------------------
                               AST RESEARCH, INC.
             (Exact name of registrant as specified in its charter)

          DELAWARE                              95-3525565
     (STATE OR OTHER JURISDICTION OF          (IRS EMPLOYER
     INCORPORATION OR ORGANIZATION)        IDENTIFICATION NO.)

                              16215 ALTON PARKWAY
                            IRVINE, CALIFORNIA 92718
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, ZIP CODE)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 727-4141
                              --------------------


     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
                                                             -

     There were 57,964,830 shares of the registrant's Common Stock, par value
  $.01 per share, outstanding on April 25, 1997.





                               AST RESEARCH, INC.
                                     INDEX

                                                                      Page

     PART I.   FINANCIAL INFORMATION

        Item 1.   Financial Statements

                  Condensed Consolidated Balance Sheets
                    at March 29, 1997 (Unaudited)
                    and December 28, 1996                                3

                  Condensed Consolidated Statements of Operations
                  (Unaudited) for the three months ended
                  March  29, 1997 and March 30, 1996                     4

                  Condensed Consolidated Statements of Cash Flows
                    (Unaudited) for the three months ended
                    March 29, 1997 and March 30, 1996                    5

                  Notes to Condensed Consolidated Financial
                    Statements (Unaudited)                            6-11


        Item 2.   Management's Discussion and Analysis
               of Financial Condition and Results
               of Operations                                         12-22


     PART II.  OTHER INFORMATION

        Item 1.   Legal Proceedings                                  23-24

        Item 6.   Exhibits and Reports on Form 8-K                      25



      SIGNATURE                                                         25




This Quarterly Report on Form 10-Q includes certain forward-looking statements,
the realization of which may be affected by certain important factors discussed
in `Management's Discussion and Analysis of Financial Condition and Results of
Operations''and ``Additional Factors That May Affect Future Results''
thereunder and elsewhere herein.
                               AST RESEARCH, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                               March 29,        December 28,
                                                 1997               1996
(In thousands, except share amounts)          (Unaudited)
--------------------------------------------------------------------------------
<S>                                          <C>                 <C>
ASSETS

 Current assets:

  Cash and cash equivalents                  $  31,699           $ 61,063
  Accounts receivable, net of
   allowance for doubtful accounts
   of $18,741 at March 29, 1997
   and $20,243 at December 28, 1996,
   respectively                                287,146            400,061
  Inventories                                  139,571            139,007
  Deferred income taxes                         18,888             18,813
  Other current assets                          31,056             19,949
--------------------------------------------------------------------------------
      Total current assets                     508,360            638,893

 Property and equipment, net                    95,407             91,612

 Other assets                                   93,618            100,552
--------------------------------------------------------------------------------
                                             $ 697,385           $831,057
================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY (NET CAPITAL DEFICIENCY)
 Current liabilities:

  Short-term borrowings                      $ 249,869           $175,000
  Accounts payable, including
   payable to related party of
   $36,880 at March 29, 1997 and
   $58,394 at December 28, 1996,
   respectively                                197,668            272,693
  Accrued salaries, wages
   and employee benefits                        15,725             15,684
  Other accrued liabilities                    160,741            184,664
  Income taxes payable                          32,593             31,610
  Current portion of long-term debt                261                291
--------------------------------------------------------------------------------
      Total current liabilities                656,857            679,942

 Long-term debt                                131,649            131,737
 Other non-current liabilities                   4,721              7,238
 Commitments and contingencies

 Shareholders' equity (net capital deficiency):

  Preferred stock, par value $.01;
   1,000,000 shares authorized,
   500,000 shares issued and outstanding
   at March 29, 1997 and December 28, 1996,
   respectively; liquidation preference
   of $32,500,000                               27,780             27,780
  Common stock, par value $.01;
   200,000,000 shares authorized,
   57,964,830 shares issued and
   outstanding at March 29, 1997
   and 44,679,400 shares at
   December 28, 1996, respectively                 580                578
  Additional capital                           507,661            505,797
  Accumulated deficit                         (631,863)          (522,015)
--------------------------------------------------------------------------------
      Total shareholders' equity
      (net capital deficiency)                 (95,842)            12,140
--------------------------------------------------------------------------------
                                             $ 697,385           $831,057
================================================================================
</TABLE>

                            See accompanying notes.

                               AST RESEARCH, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                                         Three Months Ended
                                                     --------------------------
                                                       March 29,   March 30,
(In thousands, except per share amounts)                  1997        1996
--------------------------------------------------------------------------------
<S>                                                   <C>         <C>
Net sales                                              $346,942    $519,972
Revenue from related party                                    -      10,000
--------------------------------------------------------------------------------
Total revenue                                           346,942     529,972

Cost of sales                                           352,966     549,618
--------------------------------------------------------------------------------
Gross loss                                               (6,024)    (19,646)

Selling, general and administrative expenses             79,517      76,983
Engineering and development expenses                     11,453      10,514
--------------------------------------------------------------------------------
Total operating expenses                                 90,970      87,497
--------------------------------------------------------------------------------
Operating loss                                          (96,994)   (107,143)

Financing and other expense, net                        (11,883)     (8,617)
--------------------------------------------------------------------------------
Loss before income taxes                               (108,877)   (115,760))

Income tax provision                                        971           -
--------------------------------------------------------------------------------

Net loss                                               (109,848)   $(115,760)
================================================================================

Net loss per share                                     $  (1.90)   $   (2.59)
================================================================================

Weighted average common shares outstanding               57,894       44,682
================================================================================
</TABLE>


                            See accompanying notes.


                               AST RESEARCH, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                       Three Months Ended

                                                     March 29,     March 30,
(In thousands)                                         1997           1996
<S>                                                <C>           <C>
Net cash used in operating activities               $(103,341)    $  (4,896)

Cash flows from investing activities:
  Purchases of capital equipment, net                  (7,882)       (4,848)
  Purchases of other assets, net                         (102)         (773)
--------------------------------------------------------------------------------
     Net cash used in investing activities             (7,984)       (5,621)

Cash flows from financing activities:
  Short-term borrowings, net                           74,869        10,000
  Repayment of long-term debt                              (8)       (2,002)
  Proceeds from issuance of common stock, net             786            36
--------------------------------------------------------------------------------
     Net cash provided by financing activities         75,647         8,034

Effect of exchange rate changes on cash and
  cash equivalents                                      6,314         3,953
--------------------------------------------------------------------------------
Net increase (decrease) in cash and
  cash equivalents                                    (29,364)        1,470

Cash and cash equivalents at beginning of period       61,063       125,387
--------------------------------------------------------------------------------

Cash and cash equivalents at end of period          $  31,699      $126,857
================================================================================

Supplemental disclosures of cash flow information:
  Cash paid during the period for:
     Interest                                       $   2,404       $   866
     Income taxes                                   $      22       $     -
================================================================================
</TABLE>
                             See accompanying notes


                                       .
                               AST RESEARCH, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
                                 MARCH 29, 1997



Basis of Presentation

  The accompanying condensed consolidated financial statements have been
prepared by the Company without audit (except for the balance sheet information
as of December 28, 1996) in accordance with generally accepted accounting
principles for interim financial information and with instructions to Form 10-Q
and Article 10 of Regulation  S-X.  In the opinion of management, all
adjustments (consisting only of normal recurring accruals) considered necessary
for a fair presentation have been included.

  The accompanying condensed consolidated financial statements do not include
certain footnotes and financial presentations normally required under generally
accepted accounting principles and, therefore, should be read in conjunction
with the audited financial statements included in the Company's Annual Report on
Form 10-K for the year ended December 28, 1996 (`fiscal year 1996'').  The
results of operations for the interim periods are not necessarily indicative of
the results to be expected for the full year.

Income Taxes

  The Company provides for income taxes in interim periods based on the
estimated effective income tax rate for the complete fiscal year.  The income
tax provision is computed on the pretax loss of the consolidated entities
located within each taxing jurisdiction based on current tax law.  Deferred
taxes result from the future tax consequences associated with temporary
differences between the amount of assets and liabilities recorded for tax and
financial accounting purposes.  A valuation allowance for deferred tax assets is
recorded to the extent the Company cannot determine, in accordance with the
provisions of Statement of Financial Accounting Standards No. 109 `Accounting
for Income Taxes,'' that the ultimate realization of net deferred tax assets is
more likely than not.

  For the three-month period ended March 29, 1997, the estimated effective
income tax rate is less than the U.S. statutory rate primarily due to a 100%
valuation allowance provided against the additional deferred tax assets that
arose from the current operating loss.

  Sections 382 and 383 of the Internal Revenue Code of 1986 (``the Code'') place
certain limitations on U.S. net operating loss carryforwards and excess credits
if one or more shareholders have increased their aggregate equity ownership of
the Company by more than 50 percentage points, within a three year measurement
period.  As a result of recent shareholder equity transactions with Tandy
Corporation (`Tandy'') and Samsung Electronics Co., Ltd, (``Samsung'') on July
11, 1996, the Company experienced a change in ownership as defined in the Code.
Accordingly, the amount of taxable income or income tax in any particular year
that can be offset by net operating loss and tax credit carryforward amounts is
limited to a prescribed annual amount equal to 5.78% of the fair market value of
the Company as of July 11, 1996.  Based on preliminary calculations, the Company
does not believe that any of the net operating loss or tax credit carryforward
amounts in the aggregate will be unusable solely as a result of the annual
limitation, although the amounts that can be utilized in any year may be
limited. Should the Tender Offer and Merger Agreement be completed as proposed
(see Subsequent Events), the Company's ability to realize benefits from certain
of its net deferred tax assets may be impaired.

Inventories

  Inventories are stated at the lower of cost (first-in, first-out) or market
and consist of the following:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                                March 29,         December 28,
(In thousands)                                    1997                 1996
--------------------------------------------------------------------------------
<S>                                            <C>                  <C>
Purchased parts                                $ 70,372            $ 68,877
Work in process                                  12,127               7,380
Finished goods                                   57,072              62,750
--------------------------------------------------------------------------------
                                               $139,571            $139,007
================================================================================
</TABLE>


Restructuring

  At December 28, 1996, $5.2 million of the $125 million restructuring charge
incurred in connection with the 1993 acquisition of certain assets and
assumption of certain liabilities of Tandy's personal computer manufacturing
operation remained accrued on the Company's condensed consolidated balance
sheet.  During the three months ended March 29, 1997, the Company incurred cash
expenditures of $0.4 million and non-cash charges of $0.1 million, related
primarily to remaining lease obligations.  At March 29, 1997, $4.7 million of
the remaining restructuring accrual consists primarily of amounts provided for
remaining lease obligations and the write-down of related leasehold improvements
to net realizable value.  The lease payments are expected to be completed in
fiscal year 1999.

  At December 28, 1996, approximately $3.0 million of the $13.0 million
restructuring charge incurred in transition period 1995, in connection with the
Company's decision to increase its utilization of third-party board design and
manufacturing, remained accrued on the Company's condensed consolidated balance
sheet.  During the three months ended March 29, 1997, the Company incurred cash
expenditures of $0.9 million and non-cash charges of $0.1 million, related
primarily to severance payments, asset write-downs and lease payments for closed
facilities.  At March 29, 1997, $2.0 million of the restructuring accrual
remained on the Company's condensed consolidated balance sheet, consisting
primarily of reserves for asset write-downs and provisions for remaining lease
obligations.  As of March 29, 1997, approximately $5.1 million of the total
$11.0 million restructuring charge utilized to date relates to severance
payments made to the approximately 1,570 employees who have been terminated
under this plan.  As of March 29, 1997, the majority of the restructuring has
been completed although certain lease obligations will continue through fiscal
year 1998.

  At December 28, 1996, approximately $2.1 million of the $6.5 million
restructuring charge incurred in the second quarter of fiscal year 1996, in
connection with the consolidation and closure of certain regional offices and
reconfiguration centers and the suspension of its notebook manufacturing
operations in Taiwan, and the transfer of notebook manufacturing to third-party
original equipment manufacturers, remained accrued on the Company's condensed
consolidated balance sheet.  During the three months ended March 29, 1997, the
Company incurred cash expenditures of $0.1 million, related primarily to lease
payments for closed facilities. At March 29, 1997, approximately $2.0 million of
the restructuring accrual remained on the Company's condensed consolidated
balance sheet, consisting primarily of reserves for asset write-downs and
provisions for remaining lease obligations.  As of March 29, 1997, 250 employees
have been terminated under this plan, and the total $3.1 million accrued for
severance payments has been paid.  As of March 29, 1997, the majority of the
restructuring has been completed, although certain lease obligations will
continue through fiscal year 2001.

  During April 1997, in response to the Company's first quarter 1997 results,
the Company decided to restructure its operations.  On April 21, 1997, the
Company announced plans to reduce its workforce by 25%.  This workforce
reduction was implemented by the Company through a reduction of approximately
1,000 contract, temporary, and full-time employees in various functions.  In
addition, the Company plans to consolidate various operations, including the
closure of certain regional offices and to refocus the Company's product and
marketing strategies.   The Company expects to finalize its plans and record a
restructuring charge of approximately $10 to $15 million in the consolidated
results of operations during the second quarter of fiscal year 1997.

  No assurance can be given that the previous and the anticipated restructuring
actions will be successful or that other restructuring actions will not be
required in the future.

Financing and other expense

  Financing and other expense consist of the following:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                                         Three Months Ended
                                                   ----------------------------
                                                        March 29,   March 30,
(In thousands)                                            1997         1996
--------------------------------------------------------------------------------
<S>                                                   <C>          <C>
Interest income                                        $    409     $ 1,022
Interest expense                                        (11,822)     (7,815)
Foreign exchange gain (loss)                               (345)     (1,541)
Other                                                      (125)       (283)
--------------------------------------------------------------------------------
                                                       $(11,883)    $(8,617)
================================================================================
</TABLE>


Per Share Information

  Primary loss per common share have been computed by dividing net income
available to common stockholders by the weighted average number of common shares
outstanding during each period.

  In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128 ("SFAS 128"), Earnings Per Share.
SFAS 128 is effective for fiscal years ending after December 15, 1997.  SFAS 128
specifies the computation, presentation, and disclosure requirements for basic
earnings per share and diluted earnings per share.  The impact of adopting SFAS
128 on the computation of earnings or loss per share is not expected to be
material.

Contingencies

  The Internal Revenue Service (``IRS'') is currently examining the Company's
1989, 1990 and 1991 federal income tax returns.  In addition, the IRS has
completed its examination of the Company's 1987 and 1988 federal income tax
returns and has proposed adjustments to the Company's federal income tax
liabilities for such years.  Initially, the IRS had proposed adjustments of
approximately $12.6 million, plus accrued interest of $17.2 million.  Following
the Company's request for an administrative conference to appeal the proposed
adjustments, the IRS Appeals Office returned the case to the Examination Office
for further development because the method used in determining the original
proposed adjustments was not adopted in the final regulations. Management
believes that any aggregate liability that may result upon the final resolution
of the proposed adjustments for 1987 and 1988 or the current examinations of
1989, 1990 and 1991 will not have a material adverse effect on the Company's
consolidated financial position or results of operations.  However, management
is unable to estimate the amount of any loss that may be realized in the event
of an unfavorable outcome.

  The Company has been named as a defendant or co-defendant, generally with
other personal computer manufacturers, including such companies as IBM, AT&T,
Unisys, Digital Equipment Corporation, NEC, Olivetti, NCR, Panasonic, and
Matsushita, in eighteen similar lawsuits each of which alleges as a factual
basis the occurrence of carpal tunnel syndrome or repetitive stress injuries.
The suits naming the Company are just a few of the many lawsuits of this type
which have been filed, often naming IBM and other major computer companies. The
claims against the Company total in excess of $100 million in compensatory
damages and punitive damages and additional unspecified amounts.  The Company
has denied or is in the process of denying the claims and intends to vigorously
defend the suits. The Company is unable at this time to predict the ultimate
outcome of these suits.  Ultimate resolution of the litigation against the
Company may depend on progress in resolving this type of litigation overall.
The Company is currently unable to estimate the amount of any loss that may be
realized in the event of an unfavorable outcome.  However, before consideration
of any potential insurance recoveries, the Company believes that the claims in
the suits filed against it will not have a material impact on the Company's
consolidated financial position or results of operations.  The Company has
maintained various liability insurance policies during the periods covering the
claims above.  While such policies may limit coverage under certain
circumstances, the Company believes that it is adequately insured.  Should the
Company not be successful in defending against such lawsuits or not be able to
claim compensation under its liability insurance policies, the Company's results
of operations and financial condition may be adversely affected.

  The Company was named, along with twelve other personal computer companies,
as a defendant in a lawsuit filed on March 27, 1995 in the Superior Court for
the County of Merced, California.  The case name for this March 27, 1995 filing
is People v. Acer, et al., and the complaint alleged that the Company has
engaged in deceptive advertising and unlawful business practices in relation to
computer monitor screen measurements.  The People v. Acer lawsuit was resolved
by a Stipulated Judgment that the Company signed along with representatives of
all other defendants.  The Company was named, along with three other personal
computer or monitor companies, as a defendant in a class action lawsuit filed on
May 2, 1995 in the Superior Court for the County of Marin, California.  The case
name for this May 2, 1995 filing is Kaplan, et al. v. Viewsonic, et al., and
alleges that the defendants have engaged in unfair business practices, false
advertising and breach of implied warranty concerning the advertisement of the
size of computer monitor screens.  The Company was named, along with 37 other
defendants, in a class action lawsuit, Long v. Packard Bell, et al., filed on
August 21, 1995 in the Superior Court for the County of Orange, California,
which alleges certain claims concerning the advertising of the sizes of computer
monitors.  The Company was named, along with nine other defendants, in a class
action lawsuit, Randy Davis, Ph.D., Inc. v. AST Research, et al., filed on
August 23, 1995 in Superior Court for the County of Orange, California, which
alleges certain claims concerning the advertising of the sizes of computer
monitors.  The Company was named, along with 35 other defendants, in a class
action lawsuit, Sutter v. Acer, et al., filed on September 7, 1995 in the
Superior Court for the County of Sacramento, California, which alleges certain
claims concerning the advertising of the sizes of computer monitors.  The
Company was named, along with 41 other defendants, in a class action lawsuit,
Shapiro v. ADI Systems, Inc., et al., filed on August 14, 1995 in Santa Clara
County, California, which alleges certain claims concerning the advertising of
the sizes of computer monitors.  The Company was named, along with 29 other
defendants, in a class action lawsuit, Maizes & Maizes, et al.,  v. Apple
Computer Inc., et al., filed on December 15, 1995 in Essex County, New Jersey,
which alleges certain claims concerning the advertising of the sizes of computer
monitors.  A settlement agreement dated February 28, 1997 was signed by the
Company to settle each of these California and New Jersey class actions, and the
settlement is subject to court approval.  The settlement requires the Company to
make payments to certain prior purchasers of the Company's monitors who apply
for rebates after the purchase of additional Company products, or in a reduced
amount three years after the rebate period starts.  The Company is currently
unable to estimate the amount of any loss that may be realized in the event the
settlement should not be approved and there is an unfavorable outcome in any or
all of these cases.  However, based on preliminary facts available to the
Company, management does not believe that the outcome of these disputes will
have a material adverse impact on the Company's consolidated financial position
or results of operations.

  The Company has been named, along with Samsung and certain current and former
members of the Company's Board of Directors, as a defendant in twelve
shareholder class action lawsuits filed on or shortly after January 31, 1997.
Eleven class action complaints were filed in the Court of Chancery in New Castle
County, Delaware, under case names Miller v. Kim, et al; Tepper v. Samsung
Electronics Co., Ltd., et al.; Kenneth Steiner v. Kim, et al.; William Steiner
v. Kim, et al.; Zeiff v. AST Research, Inc., et al; Schultz v. Choo, et al.;
Ungar v. AST Research, Inc. et al.; Schnoll v. AST Research, Inc., et al.; Krim
v. AST Research, Inc., et al.; Jaroslawicz v. Kim, et al.; and Rattner v.
Samsung Electronics Co., Ltd.  A separate class action complaint was filed but
not served on January 31, 1997 in the Superior Court for the County of Orange,
California, under case name Sigler v. AST Research, Inc., et al.  On March 26,
1997, Sigler filed a First Amended complaint in the California action, which
names Samsung Electronics Co., Ltd. as the only defendant.  The Plaintiffs
allege that the defendants have engaged in an unlawful scheme to enable Samsung
to acquire all outstanding shares of the Company's stock not previously owned by
Samsung for inadequate consideration and in violation of the defendants'
fiduciary duties.  The plaintiffs seek to enjoin Samsung's proposed purchase of
the Company's outstanding shares and request unspecified monetary damages,
including attorney and expert fees and costs.  On February 27, 1997, the
plaintiffs in the Delaware cases submitted a proposed Order of Consolidation to
the court, which was entered on March 7, 1997, and the cases were consolidated
as the `Delaware Action'' under the heading In Re AST Research, Inc.
Shareholder Litigation. Concurrent with the execution of the Merger Agreement
(see Subsequent Events below), Samsung entered into a Memorandum of
Understanding with the plaintiffs in the Delaware Action.  The Memorandum of
Understanding calls for a definitive settlement agreement which will provide for
class certification, notice to the members of the class, a release of all claims
against the defendants and dismissal of the Delaware Action.  The settlement is
subject to discovery to confirm that the settlement is in the best interests of
the shareholders of the Company and to Delaware Chancery Court approval.  If the
settlement is approved by the Delaware Chancery Court and implemented, counsel
for the Delaware Plaintiffs will apply for an award of attorneys' fees and costs
to be paid by Samsung in an amount not to exceed $875,000, and defendants will
not oppose that application.  The parties intend to seek to complete the process
of entering into, implementing and seeking Delaware Chancery Court approval of,
the settlement agreement provided for in the Memorandum of Understanding as soon
as possible.

  The Company is also subject to other legal proceedings and claims that arise
in the normal course of business.  While the outcome of these proceedings and
claims cannot be predicted with certainty, management does not believe that the
outcome of any of these matters will have a material adverse effect on the
Company's consolidated financial position or results of operations.

Related Party Transactions

  On February 22, 1996, the Company entered into a Server Technology Transfer
Agreement and a Strategic Consulting Agreement with Samsung.  The Server
Technology Transfer Agreement grants Samsung a royalty-free license through July
31, 2000 to use the technical information supplied by the Company to produce
server technology products.  The Strategic Consulting Agreement grants Samsung a
royalty-free license through July 31, 2000 to use various marketing and sales
planning studies provided by the Company.  Under each agreement, Samsung paid
$5 million to the Company.  These amounts are not refundable under any
circumstance and are not contingent upon the rendering of future services by the
Company.  As a result of these agreements, $10.0 million was recorded as revenue
from related party in the quarter ended March 30, 1996.
  During the three-month periods ended March 29, 1997 and March 30, 1996, the
Company purchased components and products from Samsung of approximately $78.4
million and $84.4 million, respectively.  Amounts payable to Samsung at March
29, 1997 and December 28, 1996 were $36.9 million and $58.4 million,
respectively.

  During the first quarter of fiscal year 1997, Samsung paid the salaries of
certain employees of the Company.  The Company recorded a capital contribution
of $1.1 million, which represents the estimated compensation expense of the
employees paid by Samsung.
Subsequent Events

  On April 14, 1997, the Company and Samsung entered into an Agreement and Plan
of Merger (the `Merger Agreement'') which provides for the commencement of a
cash tender offer (the `Tender Offer'') to purchase all of the issued and
outstanding shares of the Company's common stock not currently owned by Samsung
or its affiliates at a price of $5.40 per share.  The Tender Offer was commenced
April 21, 1997 and expires May 19, 1997, unless extended.  The Merger Agreement
provides that following the completion of the Tender Offer, the Company will be
merged with Samsung or one of its subsidiaries, and the Company will become a
subsidiary of Samsung.


                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                 MARCH 29, 1997
RESULTS OF OPERATIONS

  The following table represents the results of operations for the periods
indicated as a percentage of total revenue.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                                   Percentage of Total Revenue
                                                        Three Months Ended
                                                      -----------------------
                                                       March 29,   March 30,
                                                          1997        1996
--------------------------------------------------------------------------------
<S>                                                     <C>          <C>
Net sales                                                100.0%       98.1%
Revenue from related party                                 -           1.9
--------------------------------------------------------------------------------
Total revenue                                            100.0       100.0

Cost of sales                                            101.7       103.7
--------------------------------------------------------------------------------
Gross profit loss                                         (1.7)       (3.7)

Selling, general and
  administrative expenses                                 22.9        14.5
Engineering and development
  expenses                                                 3.4         2.0
--------------------------------------------------------------------------------
Operating loss                                           (28.0)      (20.2)

Financing and other expense                               (3.4)       (1.6)
--------------------------------------------------------------------------------
Loss before income taxes                                 (31.4)      (21.8)

Income tax provision                                      (0.3)          -
--------------------------------------------------------------------------------
Net loss                                                 (31.7%)     (21.8%)
================================================================================

The following table represents selected key asset turnover ratios for the
periods indicated:

Days total revenue in
  accounts receivable                                     74.5        67.6
Inventory turnover (annualized)                           10.1        11.5
================================================================================

</TABLE>


Total Revenue

  Net sales for the quarter ended March 29, 1997 decreased 33% to $346.9
million from $520.0 million in the comparable prior-year period.  The decrease
in sales during the quarter ended March 29, 1997 can primarily be attributed to
a decrease in shipments of desktop systems and a decrease in average selling
prices, which have continued to be negatively impacted by an extremely
competitive pricing environment.  Because of this environment, the Company has
continued to take aggressive pricing actions within all of its regions to
maintain its competitive market position.  The Company anticipates that the
industry's competitive pricing environment will continue and, as a result, that
additional pricing actions may be necessary in order to maintain its competitive
price and performance product profile.  However, there can be no assurance that
future pricing actions will be effective in maintaining existing unit sales or
in stimulating unit sales growth.

  Net sales from desktop system products decreased 47% to $214.8 million in the
first quarter of fiscal year 1997 from $407.2 million in the comparable prior-
year period.  The decline in sales can be attributed to a 26% decrease in
shipments and aggressive industry pricing actions which led to lower average
selling prices. Sales of the Company's desktop systems represented 62% and 78%
of net sales for the first quarter of fiscal year 1997 and the first quarter of
fiscal year 1996, respectively.

  Net sales from notebook computer products decreased 14% to $65.2 million in
the first quarter of fiscal year 1997 from $75.5 million in the first quarter of
fiscal year 1996.  Unit shipments of notebook computers were consistent with the
first quarter of fiscal year 1996.  The decrease in notebook system sales can
primarily be attributed to lower average selling prices per unit for the quarter
ended March 29, 1997, as the Company was in the process of a product transition
period in which prices on older notebook products were reduced.  Net sales of
the Company's notebook computer products represented 19% and 15% of net sales
for the first quarter of fiscal year 1997 and the first quarter of fiscal year
1996, respectively.

  Net sales from the Company's Americas region, which includes the United
States and Canada, decreased 33% to $175.5 million in the first quarter of
fiscal year 1997, compared to $260.5 million in the first quarter of fiscal year
1996.  Net sales to the independent reseller/dealer sales channel for the first
quarter of fiscal year 1997 decreased 37% compared to the first quarter of
fiscal year 1996, and accounted for 50% of total Americas region sales in the
first quarter of fiscal year 1997 as compared to 54% of Americas region sales in
the first quarter of fiscal year 1996.  First quarter fiscal year 1997 sales to
the consumer retail sales channel decreased 28% over the first quarter of fiscal
year 1996, and accounted for 49% percent of total Americas region sales in the
first quarter of fiscal year 1997 as compared to 46% of Americas region sales in
the first quarter of fiscal year 1996.

  International sales, which includes the Company's Europe and Asia Pacific
regions, decreased 34% to $171.4 million in the first quarter of fiscal year
1997 from $259.5 million in the first quarter of fiscal year 1996.
International sales represented 49% and 50% of net sales in the first quarter of
fiscal year 1997 and the first quarter of fiscal year 1996, respectively.  Net
sales from the Company's Europe region decreased 37% in the first quarter of
fiscal year 1997 from the first quarter of fiscal year 1996 primarily due to
lower demand for the Company's products, a generally slower economic
environment, and the impact of the Company's decision to restructure its
operations in fiscal year 1996, which involved the closure of certain European
sales offices.

  Sales from the Company's Asia Pacific region, which includes Asia, the
Pacific Rim, and the Middle East, declined 23% in the first quarter of fiscal
year 1997 as compared to the first quarter of fiscal year 1996.  The decrease in
net sales was in part attributable to sales declines of 13% in the People's
Republic of China (the `PRC'').  Contributing to the decline in sales into the
PRC was a significant increase in competitive pressures within the PRC
marketplace, including a significant increase in locally produced, low cost
computers.  Also contributing to the decline in Asia Pacific sales was a 33%
decline in sales in Australia and New Zealand, due to a decrease in demand for
the Company's products and an increase in competitive pressures within those
marketplaces.

  The results of the Company's international operations are subject to currency
fluctuations.  As the value of the U.S. dollar weakens relative to other
currencies, sales in those currencies convert to more U.S. dollars; conversely,
when the value of the U.S. dollar strengthens relative to other currencies,
sales in those countries convert to fewer U.S. dollars.  The Company's net sales
were decreased 0.7% by fluctuations in the average value of the U.S. dollar
relative to other currencies during the three-month period ended March 29, 1997
compared to an increase of 0.8% in the first quarter of fiscal year 1996,
respectively.

  Total revenues for the three months ended March 30, 1996 include $10.0
million from a Server Technology Transfer Agreement and a Strategic Consulting
Agreement (the `Technology Agreements'') with Samsung Electronics Co. Ltd.
(`Samsung'').  Under the agreements, entered into on February 22, 1996, Samsung
agreed to pay $5 million for a royalty-free license through July 31, 2000 to use
the technical information supplied by the Company to produce server technology
products and $5 million for a royalty-free license through July 31, 2000 to use
various marketing and sales planning studies conducted by the Company.  Such
amounts were recorded as revenue from related party in the condensed
consolidated statement of operations for the three months ended March 30, 1996.

Gross Loss

  The Company's gross loss for the first quarter of fiscal year 1997 was 1.7%
of total revenue compared to a gross loss of 3.7% of total revenue in the first
quarter of fiscal year 1996.  The decrease in the Company's gross loss resulted
primarily from a reduction in cost of goods sold and a reduction in pricing
actions as compared to the prior-year period.  In the first quarter of fiscal
year 1996, the Company implemented aggressive inventory reduction efforts, which
required aggressive pricing actions which resulted in both lower average selling
prices and lower margins on certain products.  In addition, provisions for
excess and obsolete inventory and for warranty claims were higher in the first
quarter of fiscal year 1996 as compared to the first quarter of fiscal year
1997.

  The Company believes that the industry will continue to be characterized by
rapid technological advances and short product life-cycles resulting in
continued risk of product obsolescence.  If the Company's products become
technically obsolete, the Company's net sales and profitability may be adversely
affected.  The personal computer industry continues to experience significant
pricing pressures and the Company believes that industry consolidation and
restructuring will continue to result in an aggressive pricing environment and
continued pressure on the Company's gross profit margins during fiscal year
1997.  During the first three months of fiscal year 1997, the Company and the
majority of its competitors continued to introduce new, lower-priced, higher-
performance personal computers resulting in continued pricing pressures on both
new and older technology products.  Future pricing actions by the Company and
its competitors may continue to adversely impact the Company's gross margins and
profitability, which could also result in decreased liquidity and could
adversely affect the Company's financial position.

  The effect of foreign currency fluctuations on sales has a corresponding
impact on gross loss, as the Company's production costs are incurred primarily
in U.S. dollars.  This period-to-period currency fluctuation increased the gross
loss 0.6 percentage points for the three-month period ended March 29, 1997,
compared to a decrease of the gross loss by 0.1 percentage points in the
comparable prior-year period.  If the value of the U.S. dollar strengthens in
the future, gross margins of the Company will continue to be negatively
impacted.

  The Company's gross loss for the first quarter of fiscal year 1996 was also
reduced by 2.0 percentage points as a result of revenue of $10.0 million from
the Technology Agreements with Samsung.

Operating Expenses

  Total selling, general and administrative expenses in the first quarter of
fiscal year 1997 of $79.5 million increased by $2.5 million from the comparable
prior-year period and represented 22.9% of total revenue, versus 14.5% of total
revenue in the comparable prior-year period.  This increase can primarily be
attributed to higher legal and consulting fees, partially offset by lower
advertising expenses.

  Engineering and development costs for the three-month period ended March 29,
1997 decreased by $0.9 million from the comparable prior-year period.  The
personal computer industry is characterized by increasingly rapid product life-
cycles.  Accordingly, the Company is committed to continued investment in
research and development and believes that the timely introduction of enhanced
products with favorable price/performance features is critical to the Company's
future growth and competitive position in the marketplace.  However, there can
be no assurance that the Company's products will continue to be commercially
successful or technically advanced, or that it will be able to deliver
sufficient quantities of new products in a timely manner.  The foregoing
forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from anticipated results.  See `Additional
Factors That May Affect Future Results''herein.

Other Income and Expense

  In the first quarter of fiscal year 1997, the Company incurred net interest
expense of $11.4 million compared to $6.8 million in the first quarter of fiscal
year 1996.  Approximately $2.1 million of the increase in interest expense is
due to higher amortization expense associated with the costs of obtaining
Samsung credit line guarantees in December 1995 and December 1996.  In addition,
interest expense increased due to higher average borrowings in the first quarter
of fiscal year 1997 as compared to the first quarter of fiscal year 1996.

  For the three months ended March 29, 1997, the Company recognized net other
expense of $0.5 million compared to net other expense of $1.8 million in the
comparable prior-year period.  Other expense relates primarily to net foreign
currency transaction and remeasurement gains and losses and the costs associated
with the Company's foreign currency hedging activities.  The Company utilizes a
limited hedging strategy which is designed to minimize the effect of remeasuring
the local currency balance sheets of its foreign subsidiaries on the Company's
consolidated financial position and results of operations.  See further
discussion included under `Liquidity and Capital Resources.''

Income Tax Provision

  The Company realized an effective income tax provision rate of 0.9% and 0%
during the first quarter of fiscal year 1997 and for the first quarter of fiscal
year 1996, respectively.  The increase in the fiscal year 1997 effective tax
rate was due to an increase in U.S. taxes on the Company's foreign earnings.

  Realization of the deferred tax assets, which primarily relate to net
operating loss carryforwards, inventory reserves and other accrued liabilities,
is dependent on the Company generating approximately $143 million of future
taxable income.  Although the Company is primarily relying on certain tax
planning strategies to generate such future taxable income, such income could
also arise from reversals of existing taxable temporary differences and/or sales
of new and existing products.  The timing and amount of such future taxable
income may be impacted by a number of factors, including those discussed below
under `Additional Factors That May Affect Future Results.''  To the extent that
estimates of future taxable income are reduced or not realized, the amount of
the deferred tax asset considered realizable could be adversely affected.
Should the Tender Offer and Merger Agreement be completed as proposed, the
Company's ability to realize a benefit from its net deferred tax asset, and a
substantial portion of the Company's deferred tax asset from net operating loss
carryovers that have been offset by a valuation allowance, would be impaired.

Asset Turnover Ratios

  Days total revenue in accounts receivable for the three-month period ended
March 29, 1997 increased to 74.5 from 67.6 in the comparable prior-year period.
The increase can be primarily attributed to slower collections within the
European and Pacific Rim regions.

  Inventory turnover for the three-month period ended March 29, 1997 decreased
to 10.1 from 11.5 turns in the comparable prior-year period.  Inventory turns
decreased primarily due to a decline in sales in the first quarter of fiscal
year 1997 as compared to the first quarter of fiscal year 1996.

LIQUIDITY AND CAPITAL RESOURCES

Financing Requirements

  The Company's ability to fund its activities from operations is dependent
upon its rate of growth, ability to effectively manage its inventory, the terms
under which suppliers extend credit to the Company, the terms under which the
Company extends credit to its customers and the Company's ability to collect
under such terms, the manner in which it finances any capital expansion and the
Company's ability to access external sources of financing.  As a result of the
Company's recent operating losses, it has been necessary for the Company to look
to Samsung, its largest shareholder, for financial support while management
implements changes to the Company's business in order to return the Company to
profitability.  In addition to purchases of common stock from the Company
aggregating $309.5 million, Samsung has provided credit guarantees aggregating
$400 million that are available to support bank borrowings by the Company
through December 31, 1998 (for which Samsung received additional Company equity
securities then valued at $58.8 million) and a $100 million vendor credit line
available through November 1997 to facilitate component purchases from Samsung.

  As of March 29, 1997, the Company had borrowed $249.9 million under bank
lines supported by Samsung guarantees and had $36.9 million due to Samsung under
the vendor credit line.  The Company has additional borrowing availability under
the loan guarantees of $150.1 million, all of which is available under current
bank loan agreements.  Management believes these financial resources will be
sufficient to support the Company's liquidity requirements in fiscal 1997;
however, in the event they are not, the Company would be required to seek
additional financing from Samsung or others, for which it has no current
commitments.  The Company has not determined what steps it will take when the
existing additional support agreements terminate in December 1998.  The Company
believes that it will have adequate time prior to the expiration of the support
agreements to arrange for new sources of external financing.  The foregoing
forward-looking statement involves risks and uncertainties that could cause
actual results to differ materially from anticipated results.  See `Additional
Factors That May Affect Future Results''herein.  However, if the Company is
unable to arrange for external financing in December 1998, there would be a
material adverse effect on the Company's business, financial position and
results of operations.

  On December 14, 1993, the Company issued $315 million par value of Liquid
Yield OptionTM Notes (`LYONs''), due December 14, 2013 and received total
proceeds of approximately $111.7 million.  The LYONs are zero coupon convertible
subordinated notes which were sold at a significant discount from par value with
a yield to maturity of 5.25% and a total value at maturity of $315 million
payable in cash.  There are no periodic payments of interest on the LYONs.  Each
$1,000 principal amount at maturity of LYONs is convertible into 12.993 shares
of the Company's common stock at any time.  Upon conversion of a LYON, the
Company may elect to deliver shares of common stock at the conversion rate or
cash equal to the market value of the shares of common stock into which the
LYONs are convertible.  The holder of a LYON may require the Company to purchase
all or a portion of its LYONs on December 14, 1998, December 14, 2003 and
December 14, 2008 (the "Purchase Dates"), and such payments may reduce the
liquidity of the Company.  However, the Company may, subject to certain
exceptions, elect to pay the purchase price on any of the three Purchase Dates
in cash or shares of common stock based upon its then fair market value as
defined in the indenture, or any combination thereof.

  In addition, as of 35 business days after the occurrence of any change in
control of the Company occurring on or prior to December 14, 1998, each LYON
will be purchased for cash by the Company, at the option of the holder, for a
purchase price equal to the issue price of the LYONs plus accrued original issue
discount through the date set for such purchase.  A change in control of the
Company is deemed to have occurred under the terms of the LYONs at such time as
any person, other than the Company, has become the beneficial owner of 50% or
more of the Company's common stock or the Company is not the surviving
corporation of any consolidation or merger of the Company.  Samsung currently
has 49.4% beneficial ownership of the Company.  If the Tender Offer and Merger
Agreement are completed, it would constitute a change in control and the holders
of the LYONs would have the right to require the Company to redeem the LYONs at
their issue price plus accrued original discount through the date set for such
redemption.  Samsung has represented to the Company in the Merger Agreement that
Samsung has available credit lines or other sources of financing to fund the
Company's redemption obligations with respect to the LYONs.

  No assurance can be given that, if required, additional financing in amounts
in excess of the borrowing availability supported by current Samsung guarantees
will be available on acceptable terms or at all.
  The Company's ability to continue its on-going operations on a long term
basis is dependent upon its ability to maintain adequate financing levels,
improve gross margins, and ultimately sustain a profitable level of operations.
Management has developed plans to improve the Company's competitive position by
increasing operating efficiencies, by more focused and aggressive marketing of
the Company's products and through a sharing of expertise with Samsung, and it
anticipates that these efforts will result in an improvement of the Company's
gross margins and operating results.  However, no assurances can be given that
the Company will be successful in realizing these goals.  If the Company is
unable to improve its gross margins and operating results, management will be
required to significantly adjust the Company's operations.  The foregoing
forward-looking statement involves risks and uncertainties that could cause
actual results to differ materially from anticipated results.  See `Additional
Factors That May Affect Future Results''herein.  However, if the Company is
unable to arrange for external financing in December 1998, there would be a
material adverse effect on the Company's business, financial position and
results of operations.

Transactions with Samsung

  On December 21, 1995, the Company signed the original Additional Support
Agreement with Samsung that provides additional financial support to the
Company, including a guaranty by Samsung of a line of credit of up to $200
million through December 1997 (subsequently extended through December 1998) and
a vendor line of credit with Samsung of $100 million through November 1997 for
component purchases.  In exchange for the additional financial support, the
Company issued an option to Samsung to purchase 4.4 million shares of the
Company's common stock at an exercise price of $.01 per share, exercisable
between July 1, 1996 and June 30, 2001, and allowed Samsung to add an additional
member to the Company's Board of Directors.

  At March 29, 1997, the Company has a $200 million revolving credit facility,
guaranteed by Samsung as part of the Additional Support Agreement, with a final
maturity date of December 25, 1997.  The credit guarantee expires December 31,
1998.  The revolving credit agreement allows the Company to borrow at a rate of
LIBOR plus 0.375% per annum, or the bank's reference rate, at the Company's
option.  The Company is required to pay a commitment fee equal to 0.10% per
annum based on the average daily unused portion of the facility.  The fee is
payable quarterly in arrears.  At March 29, 1997, there was $200 million
outstanding as borrowings under this credit facility at an average interest rate
of 5.98% per annum.

  On December 13, 1996, the Company signed a Second Additional Support
Agreement with Samsung that provided the Company with additional credit
guarantees of $200 million through December 31, 1998.  As consideration for this
new credit guarantee, the Company issued 500,000 shares of non-voting preferred
stock to Samsung.  This second guarantee is in addition to the existing $200
million credit guarantee, provided pursuant to an Additional Support Agreement
between the Company and Samsung, dated December 21, 1995.  The Second Additional
Support Agreement also includes a one-year extension of the original guarantee
provided under the Additional Support Agreement, which results in guarantees
totaling $400 million expiring on December 31, 1998.

  On December 18, 1996, the Company completed the establishment of bank credit
lines totaling $100 million with three banks, which represents the initial $100
million that is guaranteed by the Second Additional Support Agreement.  In
March, 1997, the Company completed the establishment of bank credit lines
totaling $100 million which represents the second $100 million that is
guaranteed by the Second Additional Support Agreement.  The credit agreements
allow the Company to borrow at rates approximating prevailing market rates.  At
March 29 1997, there was $49.9 million outstanding at an average interest rate
of 5.93%.

Analysis of Cash Flows

  Working capital deficit of $148.5 million at March 29, 1997 included cash and
cash equivalents of $31.7 million compared to working capital deficit of $41.0
million and cash and cash equivalents of $61.1 million at December 28, 1996.
Net cash used in operating activities for the first quarter of fiscal year 1997
of $103.3 million was primarily used to fund the Company's current period
operating loss.  In addition to the decrease in cash and cash equivalents, the
decrease in working capital resulted from higher short-term borrowings.  The
Company had $249.9 million in short-term borrowings at March 29, 1997 compared
to $175.0 million at December 28, 1996.

  Net cash used in investing activities of $8.0 million during the first
quarter of fiscal year 1997 was primarily due to capital expenditures related to
software and implementation costs associated with the Company's new world-wide
transaction-based information system.

  Net cash provided by financing activities of $75.6 million was due primarily
to the net proceeds from short-term borrowings of $74.9 million

  The Company regularly reviews its cash funding requirements on a consolidated
basis and attempts to meet those requirements through a combination of cash on
hand, cash provided by operations, available borrowings under any revolving
credit facilities and possible future public or private debt and/or equity
offerings.  The Company utilizes a centralized approach for its cash management
activities and attempts to maximize the use of its consolidated cash resources
so as to minimize additional debt requirements while complying with any legal or
other restrictions upon the free flow of funds from one segment, division or
subsidiary to another.  The Company invests its excess cash in investment grade
short-term money market instruments.

Foreign Exchange Hedging

  In the ordinary course of business and as part of the Company's asset and
liability management, the Company enters into various types of transactions that
involve contracts and financial instruments with off-balance sheet risk. The
Company utilizes foreign exchange contracts and foreign currency borrowings to
hedge its exposure to foreign exchange rate fluctuations impacting its U.S.
dollar consolidated financial statements.  The Company attempts to minimize its
exposure to foreign currency transaction and remeasurement gains and losses due
to the effect of remeasuring the local currency balance sheets of its foreign
subsidiaries on the Company's consolidated financial position and results of
operations by utilizing a limited hedging strategy which includes the use of
foreign currency  borrowings, the netting of foreign currency assets and
liabilities and forward exchange contracts.  The actual gain or loss associated
with forward exchange contracts are limited to the contract amount multiplied by
the value of the exchange rate differential between the time the contract is
entered into and the time it matures.  The Company typically holds all of its
contracts until maturity and enters forward contracts ranging in maturity dates
from one to nine months.  Realized and unrealized gains and losses on the
forward contracts are recognized currently in the Condensed Consolidated
Statement of Operations, and any premium or discount is recognized over the life
of the contract.  Some foreign locations, such as the PRC, do not allow open
market hedging of their currencies and, therefore, the Company is not able to
hedge all of its exposure to foreign currency fluctuations.

  The Company held forward exchange contracts maturing at various dates through
August 1997 with a face value of approximately $140.5 million at March 29, 1997
and $162.6 million at December 28, 1996, which approximate the Company's
hedgeable net monetary asset exposure to foreign currency fluctuations at those
respective dates.  Unrealized losses associated with these forward contracts
totaling $3.7 million and $1.2 million for the three months ended March 29, 1997
and March 30, 1996, respectively, are included in the Company's Condensed
Consolidated Statements of Operations for those periods.  Foreign currency
borrowings at March 29, 1997 and December 28, 1996 totaled $1.4 million and $1.5
million, respectively.

ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS

  The Company's ability to fund its activities from operations is directly
dependent upon its rate of growth, ability to effectively manage its inventory,
the terms under which suppliers extend credit to the Company, the terms under
which the Company extends credit to its customers and its ability to collect
under such terms, the manner in which it finances any capital expansion, and the
Company's ability to access external sources of financing. The majority of these
sources of external financing are supported by guarantees provided to the
Company by Samsung.  The Company has not determined what steps it will take when
the existing additional support agreements terminate in December 1998. If the
Company is unable to arrange for external financing in December 1998, when the
Samsung Additional Support Agreements terminate, there would be a material
adverse effect on the Company's business, financial position and results of
operations.

  Future operating results may be impacted by a number of factors that could
cause actual results to differ materially from those stated herein, which
reflect management's current expectations.  These factors include worldwide
economic and political conditions, industry specific factors, the Company's
ability to maintain access to external financing sources (including Samsung) and
its financial liquidity, the Company's ability to timely develop and produce
commercially viable products at competitive prices, the availability and cost of
components, the Company's ability to manage expense levels, the continued
financial strength of the Company's dealers and distributors, and the Company's
ability to accurately anticipate customer demand.

  The Company's future success will be highly dependent upon its ability to
develop, produce and market products that incorporate new technology, are priced
competitively and achieve significant market acceptance.  There can be no
assurance that the Company's products will be technically advanced or
commercially successful due to the rapid improvements in computer technology and
resulting product obsolescence.  There is also no assurance that the Company
will be able to deliver commercial quantities of new products in a timely
manner.  The success of new product introductions is dependent on a number of
factors, including market acceptance, the Company's ability to manage risks
associated with product transitions, the effective management of inventory
levels in line with anticipated product demand and the timely manufacturing of
products in appropriate quantities to meet anticipated demand.  The Company
regularly introduces new products designed to replace existing products.  While
the Company attempts to closely monitor new product introductions and product
obsolescence, there can be no assurance that such transitions will occur without
adversely affecting the Company's net sales, cash flow and profitability.  In
addition, if the Company is unable to successfully anticipate and manage shifts
in personal computer technology, the Company's product life cycles could be
negatively impacted and may continue to have a material adverse effect on the
Company's net sales, cash flow and profitability.

  The Company has, over the past several years, had difficulty in bringing
products to market.  Product development delays have occurred for a variety of
reasons, primarily resulting from difficulties in the Company's product
development processes.  While the Company has focused on these issues and
believes that improved processes and procedures have been designed and
implemented, there can be no assurance that these new processes and procedures
will be successful.  If these improved processes and procedures are not
successful, there could continue to be material adverse effects on the Company's
net sales, cash flow, and profitability.

  Because of these and other factors affecting the Company's operating results,
past financial performance should not be considered a reliable indicator of
future performance, and investors should not use historical trends to anticipate
results or trends in future periods.

  The Company's participation in the highly competitive personal computer
industry often results in significant volatility in the Company's common stock
price.  Factors such as new product introductions, price changes or other
announcements by the Company or its competitors, as well as quarterly variations
in the financial results of the Company, have caused substantial fluctuations in
the market price of the Company's common stock.  In addition, the stock market
has experienced and continues to experience price and volume fluctuations that
have particularly affected the market price for securities of many companies
within the technology sector.  These broad market fluctuations, as well as
general economic and political conditions may materially adversely affect the
market price of the Company's common stock or the Company's ability to raise
capital.

  The Company believes that its production capacity and the production capacity
of its OEM suppliers for the products it manufactures and purchases,
respectively, should be sufficient to support anticipated unit volumes for the
foreseeable future.  However, if the Company is unable to obtain certain key
components, or to effectively forecast customer demand or manage its inventory,
increased inventory obsolescence or reduced utilization of production capacity
could adversely impact the Company's gross margins and results of operations.

  Increases in demand for personal computers have created industry-wide
shortages, which at times have resulted in premium prices being paid for key
components, such as flat panel display screens, dynamic random access memory
chips (`DRAMs''), static random access memory chips, CD-ROM drives and
monitors.  These shortages have occasionally resulted in the Company's inability
to procure these components in sufficient quantities to meet demand for its
products.  In addition, a number of the Company's products include certain
components, such as microprocessors, video chips, core logic, modems, lithium
ion batteries, static random access memory chips and application specific
integrated circuits, that are occasionally purchased from single sources due to
availability, price, quality or other considerations.  These single source
suppliers include purchases of selected lithium ion batteries from Sony
Corporation as well as selected core logic from Intel Corporation.  In addition,
the Company also purchases a majority of its microprocessor requirements from
Intel Corporation and a majority of its random access memory chips from Samsung.
The Company purchases both components and selected finished goods pursuant to
purchase orders placed in the ordinary course of business and has no guaranteed
supply arrangements with single source suppliers.  Reliance on suppliers
generally involves risks, including the possibility of defective parts, a
shortage of components, an increase in component costs and disruptions in
delivery of components.  Should delays, defects or shortages re-occur or
component costs significantly increase, the Company's net sales and
profitability could be adversely affected.

  The Company and Samsung have entered into strategic agreements covering a
broad range of commercial relationships including, among others, component
supply agreements for certain critical components manufactured by Samsung and
used by the Company in the manufacture of personal computers and a joint
procurement agreement providing a mechanism for Samsung and the Company to
coordinate their purchases from third parties in order to obtain more favorable
pricing.  However, as Samsung is a supplier of critical components in a highly
competitive marketplace, other suppliers may be less likely to extend attractive
terms to or to do business with the Company.  In addition, because Samsung has
other business involvement typical of large, multi-national companies and is not
based in the U.S., it is possible that some additional suppliers, customers,
employees and others will not react favorably to Samsung's investment in the
Company or to the Merger Agreement.

  Samsung is a critical supplier of components to the Company and is based in
South Korea.  Political turmoil between North and South Korea could adversely
affect the Company's operations.

  In fiscal year 1996 and in transition period 1995, the Company implemented a
restructuring plan designed to increase its utilization of third-party board
manufacturing and design, to realign its Asia Pacific manufacturing operations,
to close or consolidate certain regional offices, and to transfer manufacturing
of notebooks to OEMs.  The Company's increased reliance on third-party board
manufacturers involves risks, including the possibility of defective boards, a
shortage of boards, an increase in board costs and disruptions in the delivery
of boards.  Should delays, defects or shortages occur or board costs
significantly increase, the Company's net sales and profitability could be
adversely affected.  In addition, the Company's notebook products are
manufactured by outside vendors including Quanta Computer, Inc. and Compal
Electronics, Inc. in Taiwan.  These OEMs are subject to the risks inherent in
notebook computing technology, development and manufacturing.  As a result, the
Company's ability to bring its notebook products to market is highly dependent
upon these third-party vendors to effectively design, develop and manufacture
these products.  Should these companies not be able to design, develop or
manufacture the Company's products in a timely manner, the Company's net sales,
cash flows, and profitability could be adversely affected.

  During April 1997, in response to the Company's first quarter 1997 results,
the Company decided to restructure its operations.  On April 21, 1997, the
Company announced plans to reduce its workforce by 25%.  This workforce
reduction was implemented by the Company through a reduction of approximately
1,000 contract, temporary, and full-time employees in various functions.  In
addition, the Company plans to consolidate various operations, including the
closure of certain regional offices and to refocus the Company's product and
marketing strategies.   The Company expects to finalize its plans and record a
restructuring charge of approximately $10 to $15 million in the consolidated
results of operations during the second quarter of fiscal year 1997.  Although
the Company believes that the restructuring activities are necessary, no
assurance can be given that the restructuring action will be successful or that
similar action will not be required in the future.

  The ongoing introduction of new technologies across all of the Company's
product lines is intended to enable the Company to keep pace with rapid market
changes and to minimize the effect of continued competitive pricing.  However,
there can be no assurance that the Company will have the financial resources,
marketing and distribution capability, or the technological knowledge to compete
successfully.  In addition, the Company's results of operations could be
adversely impacted if it is unable to effectively implement its technological
and marketing alliances with other companies, such as Microsoft and Intel, and
manage the competitive risks associated with these relationships.

  The Company participates in a highly competitive and volatile industry that
is characterized by dynamic customer demand patterns, rapid introduction of new
products, technological advances and product obsolescence resulting in an
extremely competitive pricing environment with downward pressure on gross
margins.  The Company's ability to compete is largely dependent upon its
financial strength and its ability to adequately fund its operations.  Many of
the Company's competitors are significantly larger and have significantly
greater financial resources than the Company.  In addition, large industrial
companies with significant consumer electronics expertise, including such
companies at Sony, Fujitsu, Hitachi and Toshiba have entered or increased the
personal computer marketplace with products competing for market share with the
Company's products, leading to increased competition and downward pricing
pressures.  The Company anticipates that the personal computer industry will
continue to experience intense price competition and dramatic price reductions.
There can be no assurance that future pricing actions by the Company and its
competitors will not adversely impact the Company's net sales and profitability.

  General economic conditions have an impact on the Company's business and
financial results.  From time to time, the markets in which the Company sells
its products experience weak economic conditions that may negatively affect
sales of the Company's products.  Although the Company does not consider its
business to be highly seasonal, it has historically experienced seasonally
higher sales in the consumer retail sales channel in the quarter ended in
December due to strong holiday demand for some of its products in certain
regions.

  The Company's international operations may be affected by changes in United
States trade relationships, increased competition and the political and economic
stability of the locations in which sales occur.  The Company operates in
foreign locations, such as the PRC, where future sales may be dependent upon
continuing favorable trade relations.  Additionally, foreign locations such as
the PRC and Taiwan may experience changes in their general economic stability
due to such factors as increased inflation and political turmoil.  Also,
political tensions between the PRC and Taiwan could adversely affect the
Company's operations, particularly its notebook production.  Any significant
change in United States trade relations or the economic or political stability
of foreign locations in which the Company operates could have an adverse effect
on the Company's net sales and profitability.  In addition, the Company
maintains offices in Hong Kong, which will become part of the PRC.

  Consistent with industry practice, in certain circumstances, the Company
provides customers with stock rebalancing and price protection rights that
permit these distributors, retailers and dealers to return slow-moving products
to the Company for credit or to receive price adjustments if the Company lowers
the price of selected products within certain time periods.  Stock rebalancing
programs allow customers to return product and receive credit for the invoiced
price less any post-sale pricing reductions.  Partially offsetting the credit
issued is the value of the product which is returned.  The Company, as part of
its revenue recognition policy, estimates the expected returns and reduces both
sales and cost of sales accordingly.  If sales and pricing trends experienced in
the current year continue or accelerate, there can be no assurance that the
Company will not experience rates of return or price protection adjustments that
adversely impact the Company's net sales and profitability in the future.

  The Company's primary means of distribution continues to be third-party
computer resellers and consumer retailers.  While the Company continuously
monitors and manages the credit it extends to its customers to limit its credit
risk, the Company's business could be adversely affected in the event that the
financial condition of its customers weakens.  In the event of the financial
failure of a major customer, the Company would experience disruptions in its
distribution as well as the loss of the unsecured portion of any outstanding
accounts receivable.

  The Company's international operations are also affected by foreign currency
fluctuations.  The financial statements of the Company's foreign subsidiaries
are remeasured into the United States dollar functional currency for
consolidated reporting purposes.  Gains and losses resulting from this
remeasurement process are recognized currently in the consolidated results of
operations.  The Company attempts to minimize the impact of these remeasurement
gains and losses by utilizing a limited hedging strategy which includes the use
of foreign currency borrowings, the netting of foreign currency assets and
liabilities, and forward exchange contracts.  The Company's exposure to currency
fluctuations will continue to increase as a result of the expansion of its
international operations.  Significant fluctuations in currency values could
have an adverse effect on the Company's net sales, gross margins and
profitability.

  The personal computer industry presents risks for claims of infringement of
patents, trademarks and copyrights.  From time to time, the Company is notified
that certain of its products may infringe upon the intellectual property rights
of others.  The Company generally evaluates all such notices on a case-by-case
basis to determine whether licenses are necessary or desirable.  If such claims
are made, there can be no assurance that licenses will be available on
commercially reasonable terms or that retroactive royalty payments on sales of
the Company's computer products will not be required.  In addition, substantial
costs may be incurred in disputing such claims.  The Company believes that the
actions it takes to avoid or minimize the impact to the Company of such claims
are prudent; however, there can be no assurance that such claims will not occur
or would not have a material adverse effect on the Company's business operations
and profitability.  Pursuant to its Strategic Alliance Agreement with Samsung
dated February 27, 1995, the Company has a Patent Cross License Agreement with
Samsung dated July 31, 1995 that expires on July 31, 2005.

  In determining the amount of the valuation allowance required to be
established against deferred tax assets in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, `Accounting for Income
Taxes,''the Company has primarily relied upon its ability to generate future
taxable income using certain available tax planning strategies.  The amount of
taxable income that could actually be generated from such tax planning
strategies is dependent upon the Company being able to sell certain appreciated
assets at the current estimated fair market value.  Although the Company has
utilized an outside valuation firm to determine the current estimated fair
market value of such assets, changes in market conditions could result in a
reduction of the estimated fair market value of these assets that would
adversely affect the amount of the valuation allowance and reduce the amount of
net deferred tax assets considered realizable.

  Sections 382 and 383 of the Internal Revenue Code of 1986 (``the Code'') place
certain limitations on U.S. net operating loss carryforwards and excess credits
if one or more shareholders have increased their aggregate equity ownership of
the Company by more than 50 percentage points, within a three year measurement
period.  As a result of recent shareholder equity transactions with Tandy
Corporation (`Tandy'') and Samsung on July 11, 1996, the Company has
experienced a change in ownership as defined in the Code.  Accordingly, the
amount of taxable income or income tax in any particular year that can be offset
by net operating loss and tax credit carryforward amounts is limited to a
prescribed annual amount equal to 5.78% of the fair market value of the Company
as of July 11, 1996.  Based on preliminary calculations, the Company does not
believe that any of the net operating loss or tax credit carryforward amounts in
the aggregate will be unusable solely as a result of the annual limitation,
although the amounts that can be utilized in any year may be limited.  Should
the Tender Offer and Merger Agreement be completed as proposed (see Subsequent
Events), the Company's ability to realize benefits from certain of its net
deferred tax assets may be impaired.

  The Company's corporate headquarters facility, at which the majority of its
research and development activities are conducted, is located near major
earthquake faults which have experienced earthquakes in the past.  While the
Company does carry insurance at levels management believes to be prudent, in the
event of a major earthquake or other disaster affecting one or more of the
Company's facilities, it is likely that insurance proceeds would not cover all
of the costs incurred and, therefore, the operations and operating results of
the Company could be adversely affected.

  This Quarterly Report on From 10-Q contains certain forward-looking
statements that are based on current expectations.  In light of the important
factors that can materially affect results, including those set forth above and
elsewhere in this Form 10-Q, the inclusion of forward-looking information herein
should not be regarded as a representation by the Company or any other person
that the objectives or plans of the Company will be achieved.  The Company may
encounter competitive, technological, financial, legal and business challenges
making it more difficult than expected to continue to develop, market,
manufacture and ship new products on a timely basis; competitive conditions
within the personal computer industry may change adversely; demand for the
Company's products may weaken; the market may not accept the Company's new
products; the Company may be unable to retain existing key management personnel;
inventory risks may rise due to shifts in market demand; the Company's forecasts
may not accurately anticipate market demand; and there may be other material
adverse changes in the Company's operations or business.  Certain important
presumptions affecting the forward-looking statements made herein include, but
are not limited to (i) timely identifying, designing, and delivering new
products as well as enhancing existing products; (ii) implementing current
restructuring plans; (iii) defending positions with the IRS and in the legal
proceedings described in this document, results of such undertakings being
difficult to assess and potential material adverse effects due to ultimate loss
on substantive issues or the substantial expense and loss of time connected with
defense of claims; (iv) accurately forecasting capital expenditures; (v)
improving efficiencies in world wide distribution activities; (vi) predicting
the significance of the indirect sales channel; (vii) obtaining new sources of
external financing prior to the expiration of existing or contemplated support
arrangements entered into with Samsung; and (viii) the nature and extent of
Samsung's continued financial and other support for the Company, and the outcome
of the Tender Offer and Merger Agreement.  Assumptions relating to budgeting,
marketing, advertising, product development, litigation, taxation and other
management decisions are subjective in many respects and thus susceptible to
interpretations and periodic revisions based on actual experience and business
developments, the impact of which may cause the Company to alter its marketing,
capital expenditure or other budgets, which may in turn affect the Company's
financial position and results of operations.

                                    PART II

                               OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

  The Internal Revenue Service (``IRS'') is currently examining the Company's
1989, 1990 and 1991 federal income tax returns.  In addition, the IRS has
completed its examination of the Company's 1987 and 1988 federal income tax
returns and has proposed adjustments to the Company's federal income tax
liabilities for such years.  Initially, the IRS had proposed adjustments of
approximately $12.6 million, plus accrued interest of $17.2 million.  Following
the Company's request for an administrative conference to appeal the proposed
adjustments, the IRS Appeals Office returned the case to the Examination Office
for further development, because the method used in determining the original
proposed adjustments was not adopted in the final regulations.  Management
further believes that any aggregate liability that may result upon the final
resolution of the proposed adjustments for 1987 and 1988 or the current
examinations of 1989, 1990 and 1991 will not have a material adverse effect on
the Company's consolidated financial position or results of operations.
However, management is unable to estimate the amount of any loss that may be
realized in the event of an unfavorable outcome.

  The Company has been named as a defendant or co-defendant, generally with
other personal computer manufacturers, including such companies as IBM, AT&T,
Unisys, Digital Equipment Corporation, NEC, Olivetti, NCR, Panasonic, and
Matsushita, in eighteen similar lawsuits, each of which alleges as a factual
basis the occurrence of carpal tunnel syndrome or repetitive stress injuries.
The suits naming the Company are just a few of the many lawsuits of this type
which have been filed, often naming IBM and other major computer companies. The
claims against the Company total in excess of $100 million in compensatory
damages and punitive damages and additional unspecified amounts.  The Company
has denied or is in the process of denying the claims and intends to vigorously
defend the suits. The Company is unable at this time to predict the ultimate
outcome of these suits.  Ultimate resolution of the litigation against the
Company may depend on progress in resolving this type of litigation overall.
The Company is currently unable to estimate the amount of any loss that may be
realized in the event of an unfavorable outcome.  However, before consideration
of any potential insurance recoveries, the Company believes that the claims in
the suits filed against it will not have a material impact on the Company's
consolidated financial position or results of operations.  The Company has
maintained various liability insurance policies during the periods covering the
claims above.  While such policies may limit coverage under certain
circumstances, the Company believes that it is adequately insured.  Should the
Company not be successful in defending against such lawsuits or not be able to
claim compensation under its liability insurance policies, the Company's results
of operations and financial condition may be adversely affected.

  The Company was named, along with twelve other personal computer companies,
as a defendant in a lawsuit filed on March 27, 1995 in the Superior Court for
the County of Merced, California.  The case name for this March 27, 1995 filing
is People v. Acer, et al., and the complaint alleged that the Company has
engaged in deceptive advertising and unlawful business practices in relation to
computer monitor screen measurements.  The People v. Acer lawsuit was resolved
by a Stipulated Judgment that the Company signed along with representatives of
all other defendants.  The Company was named, along with three other personal
computer or monitor companies, as a defendant in a class action lawsuit filed on
May 2, 1995 in the Superior Court for the County of Marin, California.  The case
name for this May 2, 1995 filing is Kaplan, et al. v. Viewsonic, et al., and
alleges that the defendants have engaged in unfair business practices, false
advertising and breach of implied warranty concerning the advertisement of the
size of computer monitor screens.  The Company was named, along with 37 other
defendants, in a class action lawsuit, Long v. Packard Bell, et al., filed on
August 21, 1995 in the Superior Court for the County of Orange, California,
which alleges certain claims concerning the advertising of the sizes of computer
monitors.  The Company was named, along with nine other defendants, in a class
action lawsuit, Randy Davis, Ph.D., Inc. v. AST Research, et al., filed on
August 23, 1995 in Superior Court for the County of Orange, California, which
alleges certain claims concerning the advertising of the sizes of computer
monitors.  The Company was named, along with 35 other defendants, in a class
action lawsuit, Sutter v. Acer, et al., filed on September 7, 1995 in the
Superior Court for the County of Sacramento, California, which alleges certain
claims concerning the advertising of the sizes of computer monitors.  The
Company was named, along with 41 other defendants, in a class action lawsuit,
Shapiro v. ADI Systems, Inc., et al., filed on August 14, 1995 in Santa Clara
County, California, which alleges certain claims concerning the advertising of
the sizes of computer monitors.  The Company was named, along with 29 other
defendants, in a class action lawsuit, Maizes & Maizes, et al.,  v. Apple
Computer Inc., et al., filed on December 15, 1995 in Essex County, New Jersey,
which alleges certain claims concerning the advertising of the sizes of computer
monitors. A settlement agreement dated February 28, 1997 was signed by the
Company to settle each of these California and New Jersey class actions, and the
settlement is subject to court approval.  The settlement requires the Company to
make payments to certain prior purchasers of the Company's monitors who apply
for rebates after the purchase of additional Company products, or in a reduced
amount three years after the rebate period starts.  The Company is currently
unable to estimate the amount of any loss that may be realized in the event the
settlement should not be approved and there is an unfavorable outcome in any or
all of these cases.  However, based on preliminary facts available to the
Company, management does not believe that the outcome of these disputes will
have a material adverse impact on the Company's consolidated financial position
or results of operations.

  The Company has been named, along with Samsung and certain current and former
members of the Company's Board of Directors, as a defendant in twelve
shareholder class action lawsuits filed on or shortly after January 31, 1997.
Eleven class action complaints were filed in the Court of Chancery in New Castle
County, Delaware, under case names Miller v. Kim, et al; Tepper v. Samsung
Electronics Co., Ltd., et al.; Kenneth Steiner v. Kim, et al.; William Steiner
v. Kim, et al.; Zeiff v. AST Research, Inc., et al; Schultz v. Choo, et al.;
Ungar v. AST Research, Inc. et al.; Schnoll v. AST Research, Inc., et al.; Krim
v. AST Research, Inc., et al.; Jaroslawicz v. Kim, et al.; and Rattner v.
Samsung Electronics Co., Ltd.  A separate class action complaint was filed but
not served on January 31, 1997 in the Superior Court for the County of Orange,
California, under case name Sigler v. AST Research, Inc., et al.  On March 26,
1997, Sigler filed a First Amended Complaint in the California action, which
names Samsung Electronics Co., Ltd. as the only defendant.  The Plaintiffs
allege that the defendants have engaged in an unlawful scheme to enable Samsung
to acquire all outstanding shares of the Company's stock not previously owned by
Samsung for inadequate consideration and in violation of the defendants'
fiduciary duties.  The plaintiffs seek to enjoin Samsung's proposed purchase of
the Company's outstanding shares and request unspecified monetary damages,
including attorney and expert fees and costs.  On February 27, 1997, the
plaintiffs in the Delaware cases submitted a proposed Order of Consolidation to
the court, which was entered on March 7, 1997, and the cases were consolidated
as the `Delaware Action'' under the heading In Re AST Research, Inc.
Shareholder Litigation. Concurrent with the execution of the Merger Agreement,
Samsung entered into a Memorandum of Understanding with the plaintiffs in the
Delaware Action.  The Memorandum of Understanding calls for a definitive
settlement agreement which will provide for class certification, notice to the
members of the class, a release of all claims against the defendants and
dismissal of the Delaware Action.  The settlement is subject to discovery to
confirm that the settlement is in the best interests of the shareholders of the
Company and to Delaware Chancery Court approval.  If the settlement is approved
by the Delaware Chancery Court and implemented, counsel for the Delaware
Plaintiffs will apply for an award of attorneys' fees and costs to be paid by
Samsung in an amount not to exceed $875,000, and defendants will not oppose that
application.  The parties intend to seek to complete the process of entering
into, implementing and seeking Delaware Chancery Court approval of, the
settlement agreement provided for in the Memorandum of Understanding as soon as
possible.

  The Company is also subject to other legal proceedings and claims that arise
in the normal course of business.  While the outcome of these proceedings and
claims cannot be predicted with certainty, management does not believe that the
outcome of any of these matters will have a material adverse effect on the
Company's consolidated financial position or results of operations.  The
foregoing forward-looking statements involve risks and uncertainties that could
cause actual results to differ materially from anticipated results.  See
`Additional Factors That May Affect Future Results'' under ``Management's
Discussion and Analysis of Financial Condition and Results of Operations.''

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

   (a) Exhibits
         10.33 Revolving line of credit agreement dated March 7, 1997 between
               AST Research, Inc. and NationsBank.
         10.34 Revolving line of credit agreement dated March 21, 1997 between
               AST Research, Inc. and Credit Lyonnais.
         10.35 Revolving line of credit agreement dated March 28, 1997 between
               AST Research, Inc. and Banca Commerciale Italiana.
         11.   Computation of Net Loss Per Share.
         27.   Financial Data Schedule.


   (b) Reports on Form 8-K

       On January 22, 1997, the Company filed a report on Form 8-K, reporting
       under Item 5 thereof, announcing that Scott Bower was named Senior Vice
       President, Sales and Marketing, Americas and an officer of the Company.

       On February 3, 1997, the Company filed a report on Form 8-K, reporting
       under Item 5, thereof announcing that Samsung proposed to commence
       negotiations to acquire all of the outstanding shares of common stock of
       the Company not currently owned by Samsung or its affiliates at a price
       of $5.10 per share.  The Company's Board of Directors formed a special
       committee, consisting of the Independent Directors, to evaluate the
       Samsung Proposal, and to consider other options that may be available to
       AST.

AST, Advantage!, and GRiD are registered trademarks of AST Research, Inc.
Ascentia, Bravo, Premmia and Manhattan are trademarks of AST Research, Inc.
Pentium is a registered trademark of Intel Corporation.  Windows is a registered
trademark of Microsoft Corporation.  Tandy is a registered trademark of Tandy
Corporation.  All other product or service names mentioned herein may be
trademarks or registered trademarks of their respective owners.


                                   SIGNATURE

   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.

                                          AST RESEARCH, INC.
                                             (Registrant)


Date: May 13, 1997                      /s/ WON S. YANG
                                            Won S. Yang
                                            Senior Vice President