<PAGE>   1
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                       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 31, 1998


[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities 
     Exchange Act of 1934.

               For the transition period from _____ to_____

                         Commission file number: 0-11778

                              --------------------

                          SEEQ TECHNOLOGY INCORPORATED
             (Exact name of registrant as specified in its charter)

             Delaware                                     94-2711298
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                       Identification No.)

                              47200 Bayside Parkway
                            Fremont, California 94538
                                 (510) 226-7400
             (Address, including zip code, of Registrant's principal
          executive offices and telephone number, including area code)

                              --------------------

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 [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Common Stock, $0.01 par value                           30,651,180
  (Class of common stock)                 (Shares outstanding at March 31, 1998)

--------------------------------------------------------------------------------

This report on Form 10-Q, including all exhibits, contains 14 pages.


                                       1
<PAGE>   2

                          SEEQ TECHNOLOGY INCORPORATED

                                    FORM 10-Q

                                Table of Contents



<TABLE>
<CAPTION>
                                                                                                 PAGE
<S>                                                                                              <C>
PART I.  FINANCIAL INFORMATION

Item 1. Condensed Financial Statements .........................................................   3
Item 2  Management's Discussion and Analysis of Financial Condition and Results of Operations ..   8


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings .....................................................................  12
Item 2.  Changes in Securities .................................................................  12
Item 3.  Defaults upon Senior Securities .......................................................  12
Item 4.  Submission of Matters to a Vote of Security Holders ...................................  13
Item 5.  Other Information .....................................................................  13
Item 6.  Exhibits and Reports on Form 8-K ......................................................  13
</TABLE>


                                       2
<PAGE>   3

This Quarterly Report of Form 10-Q may contain forward-looking statements that
involve risks and uncertainties. The Company's actual results may differ
materially from the results discussed in any such forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed under the captions "Legal Proceedings" and "Factors Affecting
Operating Results" contained herein and under the caption "Business Risks" in
the Company's fiscal 1997 annual report on Form 10-K.

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS



                          SEEQ TECHNOLOGY INCORPORATED
                       CONDENSED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                            Three months ended          Six months ended
                                          Mar. 31,      Mar. 31,      Mar. 31,      Mar. 31,
                                            1998          1997          1998          1997
                                          --------      --------      --------      --------
<S>                                       <C>           <C>           <C>           <C>     
Revenues                                    $7,880        $8,031       $15,432       $14,655
Cost of revenues                             4,442         5,059         8,625         9,619

Gross profit                                 3,438         2,972         6,807         5,036

Operating expense
         Research and development            1,072           902         1,922         1,682
         Marketing, general and              1,445         1,444         2,979         2,696
administrative
Total operating expenses                     2,517         2,346         4,901         4,378

Income from operations                         921           626         1,906           658
Interest expense                               (80)          (87)         (168)         (170)
Interest and other income, net                 164            95           299           181

Income before income taxes                   1,005           634         2,037           669
Income tax (provision), benefit                (32)          (20)           16           (21)

Net income                                    $973          $614        $2,053          $648
                                          ========      ========      ========      ========


Net income per share:
   Basic                                     $0.03         $0.02         $0.07         $0.02
   Diluted                                   $0.03         $0.02         $0.06         $0.02

Shares used in per share calculation:
   Basic                                    30,624        30,288        30,549        30,280
   Diluted                                  32,020        31,571        32,321        31,742
                                          --------      --------      --------      --------
</TABLE>



See accompanying notes to condensed financial statements.


                                       3
<PAGE>   4

                          SEEQ TECHNOLOGY INCORPORATED
                            CONDENSED BALANCE SHEETS
                                 (In thousands)
                                   (Unaudited)


CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                             MARCH 31,  SEPTEMBER 30,
(Thousands, except share amounts)                              1998         1997
                                                              -------     -------
<S>                                                           <C>           <C>  
ASSETS
Current assets:
Cash and cash equivalents                                     $10,286       6,937
Accounts receivable, less allowances                            5,590       7,284
Inventories                                                     4,330       3,176
Deferred tax asset                                              2,029       1,950
Other current assets                                              337         332
                                                              -------     -------
Total current assets                                           22,572      19,679
                                                              -------     -------
Property and equipment, net                                     4,973       4,384
Other assets                                                    2,875       2,977
                                                              -------     -------
                                                              $30,420     $27,040
                                                              =======     =======
LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:
Accounts payable                                               $2,335      $1,582
Accrued salaries, wages and employee benefits                     684         698
Other accrued liabilities                                         676         997
Deferred income on sales to distributors                          227         146
Current portion of capitalized lease obligations                1,422       1,091
                                                              -------     -------
Total current liabilities                                       5,344       4,514
                                                              -------     -------
Long-term liabilities                                           3,491       3,308
                                                              -------     -------
Total stockholders' equity                                     21,585      19,218
                                                              -------     -------
                                                              $30,420     $27,040
                                                              =======     =======
</TABLE>




See accompanying notes to condensed financial statements.


                                       4
<PAGE>   5

                          SEEQ TECHNOLOGY INCORPORATED
                       CONDENSED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                  Six months ended
                                                               -----------------------
                                                               Mar. 31,       Mar. 31,
                                                                 1998           1997
                                                               --------      --------
<S>                                                            <C>           <C>     
OPERATING ACTIVITIES:
Net income                                                     $  2,053      $    648
Adjustments to reconcile net income to cash provided by
 operating activities:
     Depreciation and amortization                                  916           743
     Deferred taxes                                                 (79)           --
     Changes in assets and liabilities:
             Accounts receivable                                  1,694         2,212
             Inventories                                         (1,154)         (152)
             Prepaid expenses and other assets                     (110)         (162)
             Accounts payable                                       753        (2,740)
             Accrued liabilities and long term obligations         (335)           26
                                                               --------      --------
Net cash provided by (used for) operating activities              3,738           575
                                                               --------      --------

INVESTING ACTIVITIES:
Capital expenditures                                               (125)          (25)
                                                               --------      --------
Net cash provided by (used for) investing activities               (125)          (25)
                                                               --------      --------

FINANCING ACTIVITIES:
Payments of capital lease obligations                              (578)         (470)
Proceeds from issuance of stock                                     314            82
                                                               --------      --------
Net cash used for financing activities                             (264)         (388)
                                                               --------      --------

Net increase (decrease) in cash and cash equivalents              3,349           162
Cash and cash equivalents at beginning of period                  6,937         3,974
                                                               --------      --------
Cash and cash equivalents at end of period                     $ 10,286      $  4,136
                                                               ========      ========
</TABLE>



See accompanying notes to condensed financial statements.


                                       5
<PAGE>   6

                          SEEQ TECHNOLOGY INCORPORATED
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1. BASIS OF PRESENTATION

        The accompanying unaudited condensed financial statements of SEEQ
Technology Incorporated ("SEEQ" or the "Company") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the rules and regulations of the Securities and Exchange
Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements and should be read in conjunction with the financial
statements and the notes thereto included in the Company's Annual Report to
Stockholders for the fiscal year ended September 30, 1997. These financial
statements reflect, in the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position and results of operations as of and for the periods indicated.

        The results of operations for the six months ended March 31, 1998 are
not necessarily indicative of the results expected for the year ending September
30, 1998.

        For purposes of presentation, the Company has shown its fiscal quarters
as ending on December 31, March 31, June 30 and September 30; whereas, in fact,
the Company operates on a 52/53-week fiscal year ending on the last Sunday in
September of each year. The fiscal quarter ends are actually December 28, March
29, June 28 and September 27 for the year ending September 30, 1998, and
actually December 29, March 30, June 29 and September 28 for the year ending
September 30, 1997.


NOTE 2. INVENTORIES

        Inventories were comprised of the following:
<TABLE>
<CAPTION>
                                         Mar. 31,       Sep. 30,
                                           1998           1997
                                         --------       --------
                                              (in thousands)
<S>                                      <C>             <C>   
                 Work in process         $1,243          $  437
                 Finished goods           3,087           2,739
                                         ------          ------
                                         $4,330          $3,176
                                         ======          ======
</TABLE>

NOTE 3. NON-RECURRING PRODUCTION TRANSFER COSTS

        Non-recurring costs such as tooling and engineering costs resulting from
transferring production of current products to new foundries are capitalized and
amortized to cost of revenues over the shorter of: the remaining life of the
product, the term of the foundry agreement or two years. Non-recurring costs
which are associated with the development of new products are expensed as
research and development costs when incurred. During the six month period ended
March 31, 1998 the Company did not capitalize any of such costs. During the six
month period ended March 31, 1997 the Company capitalized $250,000 of
non-recurring production transfer costs. Amortization of aggregate capitalized
non-recurring costs for the six month periods ended March 31, 1998 and March 31,
1997 was $207,000 and $245,000, respectively.


                                       6
<PAGE>   7

NOTE 4. NET INCOME PER SHARE


        Diluted net income per share for the six month periods ended March 31,
1998 and March 31, 1997 was determined using the treasury stock method. Diluted
net income per common share is computed using the weighted average number of
shares outstanding during the respective periods, including dilutive stock
options and warrants. The effect of such shares are excluded from the
computation if their effect is anti-dilutive.

        The Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("SFAS 128") during the first quarter of fiscal 1998. This
statement simplifies the standards for computing earnings per share (EPS)
previously defined in Accounting Principles Board Opinion No. 15 "Earnings Per
Share." All prior-period earnings per share data has been restated in accordance
with SFAS 128. SFAS 128 requires presentation of both Basic EPS and Diluted EPS
on the face of the income statement. Basic EPS is computed by dividing net
income available to common stockholders (numerator) by the weighted average
number of common shares outstanding (denominator) during the period. Diluted EPS
gives effect to all dilutive potential common shares outstanding during the
period including stock options, using the treasury stock method. In computing
Diluted EPS, the average stock price for the period is used in determining the
number of shares assumed to be purchased from the exercise of stock options.

        Following is a reconciliation of the numerators and denominators of the
Basic and Diluted EPS computations for the periods presented below:


                    (In thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                            Three Months Ended     Six Months Ended
                                                           --------------------  --------------------
                                                           March 31,  March 31,  March 31,  March 31,
                                                             1998       1997       1998       1997
                                                            ------     ------     ------     ------
<S>                                                         <C>        <C>        <C>        <C>   
Net income available to common stockholders (numerator)     $  973     $  614     $2,053     $  648

Shares calculation (denominator):

Weighted average shares outstanding                         30,624     30,288     30,549     30,280

Effect of dilutive securities:
Options                                                      1,396      1,283      1,772      1,462
                                                            ------     ------     ------     ------

Average shares outstanding assuming dilution                32,020     31,571     32,321     31,742
                                                            ======     ======     ======     ======

Basic earnings per share                                    $ 0.03     $ 0.02     $ 0.07     $ 0.02
                                                            ======     ======     ======     ======

Diluted earnings per share                                  $ 0.03     $ 0.02     $ 0.06     $ 0.02
                                                            ======     ======     ======     ======
</TABLE>


Options to purchase 621,000 and 987,000 shares of common stock were outstanding
during the three month periods ended March 31, 1998 and March 31, 1997
respectively but were not included in the computations of diluted EPS as the
option exercise price was higher than the average market price of the common
shares. Options to purchase 383,000 and 709,000 shares of common stock were
outstanding during the six month periods ended March 31, 1998 and March 31, 1997
respectively but were not included in the computations of diluted EPS as the
option exercise price was higher than the average market price of the common
shares.


                                       7
<PAGE>   8

NOTE 5. LITIGATION

        On November 28, 1995, Level One Communications Incorporated ("Level
One") filed a complaint against the Company, in the United States District Court
of Northern California, alleging patent infringement. In the complaint, Level
One claims that the Company has used and sold products in violation of two of
Level One's patents. Level One seeks immediate and permanent injunctive relief
preventing the Company from making, using, or selling any devices that infringe
such patents and unspecified damages. The Company intends to vigorously contest
all of Level One's claims. Based on the Company's review to date, management
believes that it has meritorious defenses to the claims asserted by Level One;
however, there can be no assurance that the outcome of these legal proceedings
will not have a material adverse effect on the Company's financial position or
results of operations. Patent litigation is often highly complex, can extend for
a protracted period of time, can involve substantial cost to the Company and may
divert the attention of the Company's management and technical personnel, which
can substantially increase the cost of such litigation. There can be no
assurance that such costs and diversion of resources will not have a material
adverse effect on the Company's business, financial condition and results of
operations.


        On January 21, 1998, the Court ruled upon certain motions filed by SEEQ.
SEEQ had filed motions to declare all asserted claims of the Level One patents
in the suit as invalid in view of certain prior art. As to these motions, the
Court denied SEEQ's request. SEEQ also had requested leave to amend its
counterclaim to add SEEQ's U.S. Patent 5,504,738. SEEQ asserts that Level One's
products, including the LXT 970 product, infringe the `738 patent in the manner
in which these products incorporate an auto-negotiate feature. The Court granted
SEEQ's motion to amend. Currently, the Level One litigation involves two Level
One patents and SEEQ's `738 patent. The Court has set a trial date for August,
1998. No other motions are currently pending. There can be no assurance that
such costs and diversion of resources will not have a material adverse effect on
the Company's business, financial condition and results of operations.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS


        The following discussion should be read in conjunction with the Interim
Condensed Financial Statements and Notes thereto and the SEEQ Technology
Incorporated Annual Report and Form 10-K for the fiscal year ended September 30,
1997.

        This Quarterly Report of Form 10-Q contains forward-looking statements
that involve risks and uncertainties. The Company's actual results may differ
materially from the results discussed in any such forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed under the captions "Legal Proceedings" and "Factors Affecting
Operating Results" contained herein and under the caption "Business Risks" in
the Company's fiscal 1997 annual report on Form 10-K.

RESULTS OF OPERATIONS

        Revenues

        Net revenues were $7,880,000 in the second quarter of fiscal 1998, a
decrease of $151,000 or 2% compared to net revenues of $8,031,000 for the second
quarter of fiscal 1997. Net revenues were $15,432,000 in the six month period
ended March 31, 1998 compared to $14,655,000 for the six month period ended
March 31, 1997, an increase of $777,000 or 5%. In the second quarter of fiscal
1998, products servicing the Fast Ethernet market accounted for approximately
77% of revenues compared to 48% of revenues for the second quarter of fiscal
1997. Revenues from Fast Ethernet products were approximately 69% and 46% of
total revenues for the six month periods ended March 31, 1998 and 1997,
respectively.


                                       8
<PAGE>   9

        Gross Product Margins

        The Company includes in cost of revenues all costs associated with
subcontractor manufacturing, electrical testing, subcontractor assembly and
final test of its integrated circuits and subsystems, warehousing, shipping,
product returns and reserves for inventory obsolescence. Allowances for product
returns are netted against revenues. Gross profit for the second quarter of
fiscal 1998 was $3,438,000 or 44% of net revenues, an increase of $466,000 over
the second quarter of fiscal 1997's gross profit of $2,972,000 or 37% of net
revenues. For the six month period ended March 31, 1998, the gross profit margin
was $6,807,000 or 44% of net revenues, compared to $5,036,000 or 34% of revenues
for the comparable period of fiscal 1997. The increase in gross profit margins
is primarily attributable to changes in product mix, a decline in low margin
10Mbps transceiver revenues, a shift to higher margin products and lower
production costs, all of which were partially offset by the under-utilization of
manufacturing capacity. Gross margins in future periods will be affected
primarily by revenue levels and changes in product mix, average selling prices,
factory utilization, wafer yields, the introduction of new products, and changes
in manufacturing costs.

        Research and Development

        Research and development expenditures increased $170,000 from $902,000
in the second quarter of fiscal 1997 to $1,072,000 in the second quarter of
fiscal 1998 primarily due to an increase in outside consulting services for new
product development, partly offset by lower tooling and payroll costs. For the
six month periods ended March 31, 1997 and 1998, research and development
expenses increased $240,000 from $1,682,000 to $1,922,000, respectively. As a
percentage of net revenues, research and development expenditures increased from
11% in the second quarter of fiscal 1997 to 14% in the second quarter of fiscal
1998 and from 11% to 12% for the six month periods ended March 31, 1997 and
1998, respectively. The Company expects that the level of research and
development spending will increase in absolute dollars in the next several
quarters as a result of increased development efforts on new LAN products, but
may vary as a percentage of net revenues.

        Marketing, General and Administrative Expenses

        Marketing, general and administrative expenses increased from
$1,444,000, or 18% of revenues in the second quarter of fiscal 1997 to
$1,445,000, or 18% or revenues in the second quarter of fiscal 1998, as higher
legal and employment fees were offset by lower commissions and payroll costs.
For the six month periods ended March 31, 1997 and 1998, marketing, general and
administrative expenses increased from $2,696,000, or 18% of revenues to
$2,979,000, or 19% or revenues, respectively. This dollar increase is primarily
attributable to higher payroll, recruitment, and travel and entertainment
expenses. The Company anticipates that the level of marketing, general and
administrative expenses will vary in future periods based on expected revenue
growth.

        Interest and other, net

        Interest and other income, net increased from $95,000 in the second
quarter of fiscal 1997 to $164,000 in the second quarter of fiscal 1998 and
increased from $181,000 for the six months ended March 31, 1997 to $299,000 for
the six months ended March 31, 1998. The fluctuations in interest income are
directly affected by average cash balances. Interest expense decreased from
$87,000 in the second fiscal quarter of 1997 to $80,000 in the second quarter of
fiscal 1998. Interest expense decreased from $170,000 for the six months ended
March 31, 1997 to $168,000 for the six months ended March 31, 1998.

        Income Taxes

        The provision for income taxes increased from $20,000 in the second
quarter of fiscal 1997 to $32,000 in the second quarter of fiscal 1998. For the
first six months of fiscal 1998 the Company recognized a portion of its deferred
tax asset in the amount of $79,000. This was partially offset by a 


                                       9
<PAGE>   10

provision of $63,000 for income taxes. For the first six months of fiscal 1997
the Company recorded a provision of $21,000 for income taxes. The Company's
provisions were computed by applying the estimated annual tax rate to income
taxes, taking into account net operating loss carryforwards and alternative
minimum taxes.

FACTORS AFFECTING OPERATING RESULTS

        The Company's quarterly operating results have varied significantly in
the past and are likely to vary significantly in the future, depending on a
number of factors, many of which are outside the control of the Company. A
complete description of risk factors is contained in the Company's 1997 Annual
Report on Form 10-K, in the section entitled "Risk Factors That May Affect
Future Results." These factors include, among others, customer concentration,
the timing of introduction of new products by the Company and its competitors,
changes in the markets addressed by the Company's products, market acceptance of
the Company's and its customers' products, the volume and timing of orders
received, changes in the Company's product mix and customer base, the timing and
extent of research and development expenditures, the availability and cost of
semiconductor wafers from outside foundries, fluctuations in manufacturing
yields, product obsolescence, price erosion, competitive factors, litigation
expenses, cyclical semiconductor industry conditions and general economic
conditions.

        The Company's net revenue and cost of revenues may vary depending upon
the mix of products sold. Any unfavorable change in manufacturing yields or
product mix, delays in new product introductions, under-utilization of
manufacturing capacity, increased price competition or other factors could have
a material adverse effect on the Company's operating results and financial
condition. Historically, average selling prices in the semiconductor industry
have decreased over the life of any particular product. There can be no
assurance that the average selling prices of the Company's current or future
products will not be subject to significant pricing pressures. In addition, the
Company's business is characterized by short-term orders and shipment schedules,
and customer orders typically can be cancelled or rescheduled without
significant penalty to the customer. Due to the absence of significant
non-cancelable backlog, the Company typically plans its production and inventory
levels based on internal forecasts of customer demand, which are highly
unpredictable and can fluctuate substantially. The Company is also limited in
its ability to reduce costs quickly in response to any revenue shortfalls, which
could have a material adverse effect on the Company's business, operating
results and financial condition. Due to the foregoing factors, it is possible
that in some future quarter the Company's operating results will be below the
expectations of public market analysts and investors. In such event, the price
of the Company's Common Stock would likely be materially adversely affected.

        The "Year 2000 issue" arises because most computer systems and programs
were designed to handle only a two-digit year, not a four-digit year. When the
Year 2000 begins, these computers may interpret "00" as the year 1900 and could
either stop processing date-related computations or could process them
incorrectly. The Company has recently updated its information systems and
accordingly does not anticipate any internal Year 2000 issues from its own
information systems, databases or programs. However, the Company could be
adversely impacted by Year 2000 issues faced by major distributors, suppliers,
customers, vendors and financial service organizations with which the Company
interacts.

LIQUIDITY AND CAPITAL RESOURCES

        The Company has satisfied its cash requirements principally through cash
flow from operations, borrowings under bank lines of credit, capital lease
financing and the public and private sale of securities.

        The Company believes that existing sources of liquidity, anticipated
cash flow from operations, and borrowings under the Company's credit facility
will be adequate to satisfy its cash requirements at least through the end of
fiscal 1998. However, there can be no assurance that the Company will have
adequate resources to satisfy such requirements. It may become necessary for the
Company to raise funds from debt and/or equity financing. There can be no
assurance that such funds will be available on terms acceptable to the Company,
if at all. Issuance of additional equity securities could result in dilution to


                                       10
<PAGE>   11

stockholders. The inability to fund capital requirements would have a material
adverse effect on the Company's business, financial condition and results of
operations.

        The Company's cash and cash equivalents balance increased from
$6,937,000 as of September 30, 1997 to $10,286,000 as of March 31, 1998,
primarily from cash provided by operating activities, and partially offset by
capital expenditures and payments of capital lease obligations.

        Operating Activities

        Cash flows provided by operating activities were $3,738,000 for the six
months ended March 31, 1998 compared to $575,000 for the six months ended March
31, 1997. The increase is a result of higher net income and depreciation, and an
increase in accounts payable, partially offset by lower collections of accounts
receivable, higher inventories, and lower accrued liabilities.

        Investing Activities

        Cash flows used for investing activities were $125,000 during the first
six months of fiscal 1998, compared to $25,000 for the first six months of
fiscal 1997.

        Financing Activities

        Cash flows used for financing activities were $264,000 in the six month
period ended March 31, 1998 compared to $388,000 in the six month period ended
March 31, 1997. Net proceeds from the issuance of stock pursuant to stock
options and the Company's employee periodic stock purchase plan were $314,000
for the first six months of fiscal 1998 compared to $82,000 for the first six
months of fiscal 1997. Principal payments against capital lease obligations were
$578,000 for the six months ended March 31, 1998 compared to $470,000 for the
three months ended March 31, 1997.

        In August 1996, the Company entered into a one-year revolving line of
credit agreement with Silicon Valley Bank. This credit agreement was renewed by
the Company in July 1997. Under the terms of the revolving line of credit, the
Company can borrow the lesser of $7,000,000 or an amount determined by a formula
applied to eligible accounts receivable, at a variable interest rate equal to
the prime rate plus 0.25%. The revolving line of credit is secured by a security
interest in the Company's assets, including intellectual property and expires
August 5, 1998. The loan agreement requires the Company to remain profitable
each fiscal quarter and to maintain certain quarterly financial ratios. The loan
agreement also requires the Company to maintain a level of tangible net worth
which, in effect, limits the ability of the Company to make payments of cash
dividends. There were no borrowings outstanding under this revolving line of
credit as of March 31, 1998.


                                       11
<PAGE>   12

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On November 28, 1995, Level One Communications Incorporated ("Level One") filed
a complaint against the Company, in the United States District Court of Northern
California, alleging patent infringement. In the complaint, Level One claims
that the Company has used and sold products in violation of two of Level One's
patents. Level One seeks immediate and permanent injunctive relief preventing
the Company from making, using, or selling any devices that infringe such
patents and unspecified damages. The Company intends to vigorously contest all
of Level One's claims. Based on the Company's review to date, management
believes that it has meritorious defenses to the claims asserted by Level One;
however, there can be no assurance that the outcome of these legal proceedings
will not have a material adverse effect on the Company's financial position or
results of operations. Patent litigation is often highly complex, can extend for
a protracted period of time, can involve substantial cost to the Company and may
divert the attention of the Company's management and technical personnel, which
can substantially increase the cost of such litigation. There can be no
assurance that such costs and diversion of resources will not have a material
adverse effect on the Company's business, financial condition and results of
operations.


        On January 21, 1998, the Court ruled upon certain motions filed by SEEQ.
SEEQ had filed motions to declare all asserted claims of the Level One patents
in the suit as invalid in view of certain prior art. As to these motions, the
Court denied SEEQ's request. SEEQ also had requested leave to amend its
counterclaim to add SEEQ's U.S. Patent 5,504,738. SEEQ asserts that Level One's
products, including the LXT 970 product, infringe the `738 patent in the manner
in which these products incorporate an auto-negotiate feature. The Court granted
SEEQ's motion to amend. Currently, the Level One litigation involves two Level
One patents and SEEQ's `738 patent. The Court has set a trial date for August,
1998. No other motions are currently pending.

ITEM 2. CHANGES IN SECURITIES

        Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        Not applicable.


                                       12
<PAGE>   13

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        On March 10, 1998 an Annual Meeting of Stockholders was held. The
following Directors were elected at this meeting:

               Charles H. Giancarlo
               Alan V. Gregory
               Charles C. Harwood
               Phillip J. Salsbury

        Other matters voted Upon:

<TABLE>
<CAPTION>
                                                          Votes
                                      --------------------------------------------
                                      Affirmative        Negative          Abstain
                                      ----------         ---------         -------
<S>                                   <C>                <C>               <C>    
      Proposal to amend Company's     23,347,509         2,226,780         188,908
      Restated 1982 Stock Option
      Plan

      Proposal to amend Company's     22,441,261         3,167,469         154,467
      1989 Non-employee Director
      Stock Option Plan

      Proposal to amend the           23,705,692         1,910,643         146,862
      Company's Restated Periodic
      Purchase Plan

      Ratify the appointment of       25,592,385          118,329            52,483
      Price Waterhouse LLP as 
      independent accountants of 
      the Company for the fiscal 
      year ending September 
      28, 1998
</TABLE>



ITEM 5. OTHER INFORMATION

        Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a) Exhibits:

               10.2.4    Restated Periodic Purchase Plan, as amended
                         (incorporated herein by reference to Registrant's
                         Annual Report on Form 10-K for the fiscal year ended
                         September 30, 1991).

               10.2.5    Restated 1982 Stock Option Plan, as amended
                         (incorporated herein by reference to Registrant's Form
                         S-8 Registration Statement (33-6544) filed on July 2,
                         1993.

               10.2.6    1989 Non-Employee Director Stock Option Plan
                         (incorporated herein by reference to Registrant's Form
                         S-8 Registration Statement (Registration No. 33- 35838)
                         filed on July 11, 1990).

               27.1      Financial Data Schedule


        (b) No reports on Form 8-K were filed for the period for which this
report is being filed.


                                       13
<PAGE>   14

                                   SIGNATURES



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




                                SEEQ TECHNOLOGY INCORPORATED
                                (Registrant)



Dated:    May 8, 1998           By:

                                /s/ Phillip J. Salsbury
                                ------------------------------------
                                Phillip J. Salsbury
                                President and Chief Executive Officer



Dated:    May 8 , 1998          By:

                                /s/ Gary R. Fish
                                ------------------------------------
                                Gary R. Fish
                                Vice President, Finance, Chief Financial Officer
                                and Secretary

                                       14
<PAGE>   15
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
Exhibit
Number                            Description
------                            -----------
<S>            <C>

10.2.4         Restated Periodic Purchase Plan, as amended (incorporated herein
               by reference to Registrant's Annual Report on Form 10-K for the
               fiscal year ended September 30, 1991).

10.2.5         Restated 1982 Stock Option Plan, as amended (incorporated herein
               by reference to Registrant's Form S-8 Registration Statement
               (33-6544) filed on July 2, 1993.

10.2.6         1989 Non-Employee Director Stock Option Plan (incorporated herein
               by reference to Registrant's Form S-8 Registration Statement
               (Registration No. 33-35838) filed on July 11, 1990).

27.1           Financial Data Schedule
</TABLE>

     (b) No reports on Form 8-K were filed for the period for which this report
is being filed.