================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------
                                    FORM 10-Q

              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934.
                 For the quarterly period ended June 30, 1998

                                       OR
              ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934.
                  For the transition period from ____ to _____


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                        COMMISSION FILE NUMBER: 000-27586

                           HMT TECHNOLOGY CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

          DELAWARE                                    94-3084354
(STATE OR OTHER JURISDICTION OF          (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
 INCORPORATION OR ORGANIZATION)                                


                       1055 PAGE AVENUE, FREMONT, CA 94538
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

       Registrant's telephone number, including area code: (510) 490-3100

================================================================================

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
                                       ---      --- 

As of July 26, 1998, 43,519,299 shares of the registrant's common stock,
par value $0.001 per share, which is the only class of common stock of the
registrant, were outstanding.

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PART I FINANCIAL INFORMATION
ITEM 1. Financial Statements
                           HMT TECHNOLOGY CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
<TABLE>
<CAPTION>
                                                    June 30,     March 31,
                                                    1998         1998
                                                    ------------ ----------
                                                    (Unaudited)  (Audited)
<S>                                                 <C>          <C>
                                   ASSETS
Current assets:
  Cash and cash equivalents........................     $27,057    $24,985
  Short-term investments...........................       --             0
  Receivables, net.................................      53,257     70,660
  Inventories......................................      26,976     18,400
  Deposits, prepaid expenses and other assets......         818        629
  Deferred income taxes............................      12,249     12,249
                                                    ------------ ----------
          Total current assets.....................     120,357    126,923
Property, plant and equipment, net.................     355,306    343,856
Other assets.......................................       7,074      7,444
                                                    ------------ ----------
       Total assets................................    $482,737   $478,223
                                                    ============ ==========
                LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable.................................     $28,113    $27,301
  Accrued liabilities..............................      11,666      8,270
  Obligations under capital leases --
    current portion................................         560      2,653
                                                    ------------ ----------
          Total current liabilities................      40,339     38,224
Long-term liabilities..............................       7,684      7,984
Convertible subordinated promissory notes..........     230,000    230,000
Obligations under capital leases, net
    of current portion.............................         412        555
Deferred tax liability, long term..................      19,008     19,008
                                                    ------------ ----------
          Total liabilities........................     297,443    295,771

Stockholders' equity:
  Common Stock.....................................          43         43
  Additional paid-in capital.......................     110,912    109,164
  Retained earnings ...............................     150,988    149,894
  Distribution in excess of basis..................     (76,649)   (76,649)
                                                    ------------ ----------
          Total stockholders' equity...............     185,294    182,452
                                                    ------------ ----------
       Total liabilities and stockholders' equity..    $482,737   $478,223
                                                    ============ ==========
</TABLE>
                             See accompanying notes
<PAGE>

                           HMT TECHNOLOGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                         Three Months Ended
                                                              June 30,
                                                       ---------------------
                                                         1998       1997
                                                      ---------- ----------
                                                          (Unaudited)
<S>                                                     <C>        <C>
Net sales ........................................     $56,765    $61,243
Cost of sales ....................................      47,439     36,371
                                                     ---------- ----------
  Gross profit ..................................  .     9,326     24,872
                                                     ---------- ----------
Operating expenses:
  Research and development .......................       2,435      1,527
  Selling, general and administrative ............       2,664      3,020
                                                     ---------- ----------
     Total operating expenses ....................       5,099      4,547
                                                     ---------- ----------
Operating income .................................       4,227     20,325
Interest expense and other, net ...................      2,667        349
                                                     ---------- ----------
Income before income tax provision ...............       1,560     19,976
Income tax provision .............................         468      5,993
                                                     ---------- ----------
     Net income ..................................      $1,092    $13,983

Accretion for dividends on Mandatorily
  Redeemable Series A Preferred Stock ............         --        (909)
                                                     ---------- ----------
Net income available for common stockholders ....  .    $1,092    $13,074
                                                     ========== ==========
Net income available for common
  stockholders per share:
     Basic .......................................       $0.03      $0.30
                                                     ========== ==========
     Diluted .....................................       $0.03      $0.30
                                                     ========== ==========
Shares used in computing per share amounts:
     Basic .......................................      43,415     44,229
                                                     ========== ==========
     Diluted .....................................      43,415     44,229
                                                     ========== ==========
</TABLE>
                             See accompanying notes

<PAGE>



                           HMT TECHNOLOGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<CAPTION>
                                                      Three Months Ended
                                                         June 30,
                                                     -------------------
                                                     1998      1997
                                                     --------- ---------
                                                         (Unaudited)
<S>                                                  <C>       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income .......................................   $1,092   $15,369
  Adjustments to reconcile net income to net
     cash used in operations:
     Depreciation and amortization .................   13,129     8,080
     Changes in operating assets and liabilities:
       Receivables..................................   17,403    (4,487)
       Inventories..................................   (8,576)   (4,897)
       Deoposis, prepaid expenses and other assets..     (189)     (617)
       Accounts payable.............................      812     1,464
       Accrued liabilities..........................    3,396    10,626
       Lomg term liabilities........................     (300)    5,400
                                                     --------- ---------
          Net cash provided by operating activities.   26,767    30,938
                                                     --------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for property, plant and equipment ...  (24,592)  (39,760)
  Maturities of short-term investments .............      --      1,868
  Decrease in other assets .........................      385       116
                                                     --------- ---------
          Net cash used in investing activities ....  (24,207)  (37,776)
                                                     --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments on obligations under capital
     leases ........................................   (2,236)   (1,075)
  Proceeds from issuance of Common Stock ...........    1,748     1,079
                                                     --------- ---------
          Net cash provided by financing activities.     (488)        4
                                                     --------- ---------
  Net increase (decrease) in cash and cash
   equivalents ......................................   2,072    (6,834)
  Cash and cash equivalents at beginning of period ..  24,985    44,225
                                                     --------- ---------
  Cash and cash equivalents at end of period ........ $27,057   $37,391
                                                     ========= =========
</TABLE>
                             See accompanying notes

<PAGE>




                           HMT TECHNOLOGY CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements have been 
prepared by the Company without audit in accordance with generally 
accepted accounting principles for interim financial information 
and pursuant to rules and regulations of the Securities and 
Exchange Commission.  In the opinion of management, all adjustments 
(consisting only of normal recurring adjustments) considered 
necessary for a fair representation have been included.  These 
financial statements should be read in conjunction with the 
Company's consolidated financial statements and notes thereto 
contained in the Company's Annual Report on Form 10-K for the 
fiscal year ended March 31, 1998.

Operating results for the quarter ended June 30, 1998 may not 
necessarily be indicative of the results to be expected for any 
other interim period or for the full year.

Fiscal Year

The Company uses a 52-week fiscal year ending on March 31 and 
thirteen- to fourteen-week quarters that end on the Sunday closest 
to the calendar quarter end.

Inventories

Inventories are stated at the lower of cost or market, and are 
reported net of reserves. Cost is determined using the first-in, 
first-out basis.
<TABLE>
<CAPTION>
                                         June 30,      March 31,
                                         1998          1998
                                         ------------  ------------
                                              (in thousands)
<S>                                      <C>           <C>
Raw materials.....................            $7,053        $7,498
Work-in-process...................             7,503         6,024
Finished goods....................            12,420         4,878
                                         ------------  ------------
                                             $26,976       $18,400
                                         ============  ============
</TABLE>

Recent Accounting Pronouncements

     In June 1997, the Financial Accounting Standards Board issued  Statement
of Financial Accounting Standards No. 130 ("SFAS No. 130"),  "Reporting
Comprehensive Income," which will require the reporting of  additional
financial information in a complete set of financial statements.   SFAS No. 130
is effective for fiscal years beginning after December 15,  1997 and will
require earlier periods to be restated to reflect application  of the
provisions of SFAS No. 130.  The Company believes that the adoption  of SFAS
130 will have an immaterial effect on the financial statements. 


     In June 1997, the Financial Accounting Standards Board issued 
Statement of Financial Accounting Standards No. 131 ("SFAS No. 131"), 
"Disclosures About Segments of an Enterprise and Related Information," 
which specifies disclosure requirements for segment reporting.  SFAS No. 
131 supersedes SFAS No. 14 and SFAS No. 18 and is effective for fiscal 
years beginning after December 15, 1997, and requires earlier years to be 
restated if practicable.   The Company believes that it operates in one 
segment for purposes of SFAS 131.




<PAGE>






































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


This Discussion contains forward-looking statements, which are 
subject to certain risks and uncertainties, including without limitation 
those described in the Company's Annual Report on Form 10-K, which has 
been filed with the Securities and Exchange Commission.  Actual results 
may differ materially from the results discussed in the forward-looking 
statements.

Overview

HMT Technology Corporation (the "Company") is an independent supplier of 
high-performance thin film disks for high-end, high-capacity and removable 
hard disk drives, which in turn are used in PCs, network servers and work-
stations. 

The Company derives substantially all of its sales from the sale of thin 
film disks to a small number of customers.  Loss of or a reduction in 
orders from one or more of the Company's customers could result in a 
substantial reduction in net sales.  Because many of the Company's expense 
levels are based, in part, on its expectations as to future revenues, 
decreases in net sales may result in a disproportionately greater negative 
impact on operating results.  Due to the rapid technological change and 
frequent development of new disk drive products, it is common in the 
industry for the relative mix of customers and products to change rapidly, 
even from quarter to quarter.  At any one time the Company typically 
supplies disks in volume for fewer than twelve disk drive products.

Results of Operations

NET SALES THREE MONTHS ENDED JUNE 30, 1998 AND 1997

Net sales for the three months ended June 30, 1998 were $56.8 million, 
down 26.1% from the $76.8 million reported in the three months ended June 
30, 1997. Unit sales volume decreased 19.4% during the three months ended 
June 30, 1998, while average selling prices declined 8.4%, compared to the 
three months ended June 30, 1997. The decrease in unit sales volume during 
the three months ended June 30, 1998 was attributable to overall weakened 
industry demand as disk drive manufacturers reduced drive production and 
media inventory levels in response to excess supply in many disk drive 
market segments.   The excess media supply also heightened price 
competition among independent media suppliers, causing the decline in 
average selling prices.  Future revenue will depend, among other things, 
largely upon customer demand, unit shipments and production volumes.

During the three months ended June 30, 1998 and 1997, three customers 
individually accounted for at least ten percent of consolidated net sales.  
The Company expects that it will continue to derive a substantial portion 
of its sales from a relatively small number of customers, although the 
identity of such customers may change from period to period.


Gross Profit. Gross margin was 16.4% of net sales for the three months 
ended June 30, 1998, compared with 38.2% for the three months ended June 
30, 1997. The decline in gross margin during the three months ended June 
30, 1998 was a result of higher unit production costs and the decline in 
average selling prices versus the comparable period in fiscal 1998.  Unit 
production costs rose as fixed costs were absorbed over lower unit 
production volumes. Production volumes decreased 15.4% in the first quarter 
of fiscal 1999, compared with the first quarter of fiscal 1998. The 
increase in unit production costs caused by lower production volumes was 
partially offset by reduced expense for wages and salaries as the Company 
responded to lower demand by reducing work hours for permanent employees, 
curtailing the use of temporary personnel, and reducing the accruals for 
profit sharing and bonuses for all of the Company's personnel.

Research and Development. Research and development expenses increased 
$533,000 in the three months ended June 30, 1998, compared to the same 
period in 1997. Research and development expenses increased primarily due 
to an increase in headcount related to the Company's new product 
introductions, expanded research efforts to support the Company's overall 
capacity expansion, and continued technology enhancements.

Selling, General and Administrative. Selling, general and administrative 
expenses decreased $1.2 million in the three months ended June 30, 1998, 
compared to the same period in the prior fiscal year. The decrease in 
selling, general and administrative expenses was primarily a result of 
lower expense for wages and salaries as the Company responded to lower 
demand by reducing work hours for permanent employees, curtailing the use 
of temporary personnel, and reducing the accruals for profit sharing and 
bonuses. The Company anticipates that operating expenses will fluctuate in 
absolute dollars and as a percentage of net sales as headcount is modified 
to support new product introductions and levels of production volume and 
unit shipments.

Interest Expense, Net.  Interest expense, net increased $982,000 during 
the three months ended June 30, 1998, compared to the same period in fiscal 
1998.  The increase in interest expense, net was primarily a result of a 
decrease in interest income (as the Company's average cash balances 
declined) and capitalized interest versus the comparable period in the 
prior year.

Provision for Income Taxes. For the three months ended June 30, 1998 and 
1997, the Company recorded income taxes at its estimated annual effective 
tax rate of 30%. 

The Company's operating results historically have been, and may continue 
to be, subject to significant quarterly and annual fluctuations. As a 
result, the Company's operating results in any quarter may not be 
indicative of its future performance. Factors affecting operating results 
include: market acceptance of new products; timing of significant orders; 
changes in pricing by the Company or its competitors; timing of product 
announcements by the Company, its customers or its competitors; order 
cancellations, modifications and quantity adjustments and shipment 
rescheduling; changes in product mix; manufacturing yields; the level of 
utilization of the Company's production capacity; increases in production 
and engineering costs associated with initial manufacture of new products; 
and changes in the cost of or limitations on the availability of materials. 
The impact of these and other factors on the Company's revenues and 
operating results in any future period cannot be forecasted with certainty. 
The Company's expense levels are based, in part, on its expectations as to 
future revenues. Because the Company's sales are generally made pursuant to 
purchase orders that are subject to cancellation, modification, quantity 
reduction or rescheduling on short notice and without significant 
penalties, the Company's backlog as of any particular date may not be 
indicative of sales for any future period, and such changes could cause the 
Company's net sales to fall below expected levels. If revenue levels are 
below expectations, operating results are likely to be materially adversely 
effected. Net income, if any, and gross margins may be disproportionately 
affected by a reduction in net sales because a proportionately smaller 
amount of the Company's expenses varies with its revenues.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents increased by $2.1 million to $27.1 million at 
June 30, 1998 from March 31, 1998. Cash flows from operations were $26.8 
million for the three months ended June 30, 1998 as compared to $30.9 
million in the comparable period of 1997. Cash generated from operations 
during the three months ended June 30, 1998 reflected net income plus 
depreciation and amortization, a decrease in receivables, as well as an 
increase in accounts payable and accrued liabilities, partially offset by 
an increase in inventories. 

The Company invested $24.6 million and $39.8 million in property, plant 
and equipment during the three months ended June 30, 1998 and 1997, 
respectively. Total capital expenditures are currently planned at 
approximately $100 million during fiscal 1999.  Capital expenditures are 
primarily targeted for capacity expansion and continuing technology 
enhancements.   The Company may assess market conditions and the potential 
of a change in market demand in determining future capital spending.

Cash used by financing activities for the first three months of fiscal 
1998 reflected $2.2 million in principal payments on capital leases, offset 
by $1.7 million in cash received for employee stock purchases.

As of June 30, 1998, the Company's principal sources of liquidity 
consisted of cash, cash equivalents and short-term investments, as well as 
the unsecured $100 million revolving credit facility.

The Company believes existing cash balances, cash generated from 
operations, and funds available under its credit facilities, will provide 
adequate cash to fund its operations and ongoing  facility expansion at 
least through June 30, 1999. Further expansion of the Company's 
manufacturing capacity may require the Company to obtain additional sources 
of financing.  There can be no assurance that the Company will be able to 
obtain any needed alternative sources of financing on favorable terms, if 
at all, at such time or times as the Company may require such capital.

YEAR 2000 COMPLIANCE

     The Company has reviewed both its internal computer systems and its 
products that could be affected by the "Year 2000" issue and has identified 
some systems and a few products that will be affected.  The Company 
presently believes, with modification to existing software and conversion 
to new software, the "Year 2000" issues relating to internal computer 
systems and products will not cause significant operational problems or 
computer problems.  Furthermore, the cost of implementing these solutions 
is not anticipated to be material to the financial position or results of 
operations.  However, if such modifications and conversions are not made, 
or not completed timely, the "Year 2000" issue could have a material 
adverse impact on the operations of the Company.  Furthermore, the costs of 
such conversions and updates are based on management's best estimates, 
which are derived utilizing numerous assumptions of future events including 
such things as, but not limited to, the availability and cost of personnel 
trained in this area, the ability to locate and correct all relevant 
computer codes and similar uncertainties.

     The Company is initiating formal communications with all  of its 
significant suppliers and large customers during fiscal 1999 to determine 
the extent to which the Company is vulnerable to those third parties 
failure to remediate their own "Year 2000" issues.  There can be no 
guarantee that the systems of other companies on which significant 
suppliers and large customers rely upon will be timely converted, or a 
failure to convert by another company, or a conversion that is incompatible 
with the Company's systems will not have a material adverse impact on the 
Company.   

<PAGE>


































PART II.                        OTHER INFORMATION


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


On April 22, 1998, the Company held a Special Meeting of Stockholders. At 
such meeting, the stockholders voted on a proposal to approve an amendment 
to the Company's Employee Stock Purchase Plan to increase the aggregate 
number of shares of common stock authorized for issuance under such plan by 
1,000,000 shares as follows:  19,968,616 shares were voted in favor of the 
proposal, 8,090,423 shares were voted against the proposal, 577,904 shares 
abstained and 9,199,458 shares were broker non-votes.


Item 5.                 Other Information

Pursuant to the Company's bylaws, stockholders who wish to bring matters or 
propose nominees for director at the Company's 1999 annual meeting of 
stockholders must provide specified information to the Company between 
April 20, 1999 and May 20, 1999 (unless such matters are included in the 
Company's proxy statement pursuant to Rule 14a-8 under the Securities 
Exchange Act of 1934, as amended).



Item 6. Exhibits and Reports of Form 8-K

(a)  Exhibits:

Exhibit No.
11.1            Statement Regarding Computation of Net Income Per Share.
27.1            Financial Data Schedule.


(b)  Reports on Form 8-K:

        During the quarter ended June 30, 1998, the Company did not file any 
reports on Form 8-K.

<PAGE>















                                   SIGNATURES


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


                           HMT TECHNOLOGY CORPORATION
                                  (Registrant)


Date: August 13, 1998      BY:  /s/ Peter S. Norris
      -----------------          ------------------------------------    
                                            Peter S. Norris
                                            Vice President, Finance and
                                            Chief Financial Officer


Date: August 13, 1998      BY:  /s/ Ronald L. Schauer
      -----------------          ------------------------------------    
                                            Ronald L. Schauer
                                            President and
                                            Chief Executive Officer






























<PAGE>

                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
Exhibit No.           Description
- - -----------           -----------

<S>                 <C>                                                  
  11.1              Statement Regarding Computation of Net Income per Share.

  27.1              Financial Data Schedule
</TABLE>