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

                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 December 31, 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 February 11, 1999, 44,133,325 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.

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



                           HMT TECHNOLOGY CORPORATION

                          QUARTERLY REPORT ON FORM 10-Q

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1998


PART I       FINANCIAL INFORMATION                                       Page

Item 1.      Financial Statements

             Condensed Consolidated Balance Sheets at December 31, 1998
                 and March 31, 1998 .........................................4

             Condensed Consolidated Statements of Operations for the three
                 and nine month periods ended December 31, 1998 and 1997 ....5

             Condensed Consolidated Statements of Cash Flows for the
                 nine month periods ended December 31, 1998 and 1997 ........6

             Notes to Condensed Consolidated Financial Statements ...........7

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


PART II      OTHER INFORMATION

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

             Signatures .....................................................15





<PAGE>



















                     PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements
                           HMT TECHNOLOGY CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
<TABLE>
<CAPTION>
                                                      December 31,  March 31,
                                                        1998         1998
                                                     ------------ ------------
                                                     (Unaudited)   (Audited)
<S>                                                  <C>          <C>
                                   ASSETS
Current assets:
  Cash and cash equivalents........................      $36,739      $24,985
  Receivables, net.................................       49,023       70,660
  Inventories......................................       27,107       18,400
  Deposits, prepaid expenses and other assets......          894          629
  Deferred income taxes............................       12,249       12,249
                                                     ------------ ------------
          Total current assets.....................      126,012      126,923
Property, plant and equipment, net.................      328,547      343,856
Other assets.......................................        6,379        7,444
                                                     ------------ ------------
       Total assets................................     $460,938     $478,223
                                                     ============ ============

                LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable.................................      $22,078      $27,301
  Accrued liabilities..............................        7,116        8,270
  Obligations under capital leases --
    current portion................................          577        2,653
                                                     ------------ ------------
          Total current liabilities................       29,771       38,224
Long-term liabilities..............................        7,035        7,984
Convertible subordinated promissory notes..........      230,000      230,000
Obligations under capital leases, net
    of current portion.............................          118          555
Deferred tax liability, long term..................       19,008       19,008
                                                     ------------ ------------
          Total liabilities........................      285,932      295,771

Stockholders' equity:
  Common Stock.....................................           44           43
  Additional paid-in capital.......................      112,472      109,164
  Retained earnings ...............................      139,139      149,894
  Distribution in excess of basis..................      (76,649)     (76,649)
                                                     ------------ ------------
          Total stockholders' equity...............      175,006      182,452
                                                     ------------ ------------
       Total liabilities and stockholders' equity..     $460,938     $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        Nine Months Ended
                                   December 31,              December 31,
                             ------------------------- -------------------------
                                1998         1997         1998         1997
                             ------------ ------------ ------------ ------------
                                  (Unaudited)               (Unaudited)
<S>                          <C>          <C>          <C>          <C>
Net sales ...................    $69,792      $98,556     $183,556     $265,839
Cost of sales ...............     62,582       61,538      158,974      164,764
                             ------------ ------------ ------------ ------------
  Gross profit ..............      7,210       37,018       24,582      101,075
                             ------------ ------------ ------------ ------------
Operating expenses:
  Research and development ..      2,368        2,229        7,185        6,411
  Selling, general and
   administrative ...........      4,056        3,408        8,934       10,519
  Restructuring expenses ....     15,662         --         15,662         --
                             ------------ ------------ ------------ ------------
   Total operating expenses .     22,086        5,637       31,781       16,930
                             ------------ ------------ ------------ ------------
Operating income (loss) .....    (14,876)      31,381       (7,199)      84,145
Interest expense, net .......      2,772        2,138        8,168        5,711
                             ------------ ------------ ------------ ------------
Income (loss) before income
  tax provision (benefit)....    (17,648)      29,243      (15,367)      78,434
Income tax provision 
  (benefit) .................     (5,294)       8,773       (4,610)      23,531
                             ------------ ------------ ------------ ------------
   Net income (loss) ........   ($12,354)     $20,470     ($10,757)     $54,903
                             ============ ============ ============ ============
Net income (loss) available
  for common stockholders
  per share:
   Basic.....................     ($0.28)       $0.48       ($0.25)       $1.31
                             ============ ============ ============ ============
   Diluted...................     ($0.28)       $0.37       ($0.25)       $1.01
                             ============ ============ ============ ============
Shares used in computing
  per share amounts:
   Basic.....................     43,822       42,768       43,602       41,912
                             ============ ============ ============ ============
   Diluted...................     43,822       55,099       43,602       54,463
                             ============ ============ ============ ============
</TABLE>
                             See accompanying notes
<PAGE>




                           HMT TECHNOLOGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<CAPTION>
                                                        Nine Months Ended
                                                           December 31,
                                                     -------------------------
                                                         1998         1997
                                                     ------------ ------------
                                                           (Unaudited)
<S>                                                  <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss) ................................    ($10,757)     $54,903
  Adjustments to reconcile net income (loss) 
     to net cash used in operations:
     Depreciation and amortization .................      39,432       28,846
     Equipment & spare part  writedowns .............     13,657         --
     Changes in operating assets and liabilities:
       Receivables .................................      21,637      (14,840)
       Inventories .................................      (9,525)      (4,959)
       Deposits, prepaid expenses and other assets .        (265)        (579)
       Accounts payable ............................      (5,221)        (877)
       Accrued liabilities .........................      (1,154)      13,346
       Lomg term liabilities .......................        (949)       4,753
                                                     ------------ ------------
          Net cash provided by operating activities.      46,855       80,593
                                                     ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for property, plant and equipment ...     (36,962)    (105,538)
  Decrease in other assets .........................       1,065          519
                                                     ------------ ------------
          Net cash used in investing activities ....     (35,897)    (105,019)
                                                     ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments on obligations under capital
     leases ........................................      (2,513)      (2,141)
  Proceeds from issuance of Common Stock ...........       3,309       18,191
                                                     ------------ ------------
          Net cash provided by financing activities.         796       16,050
                                                     ------------ ------------
  Net increase (decrease) in cash and cash
   equivalents ......................................     11,754       (8,376)
  Cash and cash equivalents at beginning of period ..     24,985       55,058
                                                     ------------ ------------
  Cash and cash equivalents at end of period ........    $36,739      $46,682
                                                     ============ ============
</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 December 31, 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>
                                          December 31,   March 31,
                                            1998          1998
                                         ------------  ------------
                                              (in thousands)
<S>                                      <C>           <C>
Raw materials.....................            $6,690        $7,498
Work-in-process...................             4,818         6,024
Finished goods....................            15,599         4,878
                                         ------------  ------------
                                             $27,107       $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.

Restructuring Charge

During the third quarter of fiscal 1999, the Company announced and 
completed a restructuring plan, which included a work force reduction of 
approximately 300 employees and the consolidation of the Company's 
manufacturing operations.  The plan was primarily aimed at improving 
costs efficiencies by retiring older equipment and eliminating excess 
capacity. The Company recorded a total charge of $15.7 million, which 
included a non-cash charge of $13.7 million for equipment and related spare
parts taken out of  service during the quarter.  The restructuring charge also
included a  charge of $1.8 million for severance costs, which were paid in full
during  the third fiscal quarter, and a provision of $200,000 for contract
services in connection with the restructuring plan.

Other

During the third quarter of fiscal 1999, the Company recorded a $2.3 
million charge for inventory revaluation (included in cost of sales) and 
a $1.5 million charge for uncollectible receivables (included in 
selling, general and administrative expenses). 

2.   COMPUTATION OF NET INCOME (LOSS) PER SHARE

   The following table sets forth the computation of basic and diluted
earnings per share (in thousands, except per share data):
[CAPTION]
<TABLE>
<CAPTION>
                               Three Months Ended        Nine Months Ended
                                  December 31,              December 31,
                            ------------------------- -------------------------
                               1998         1997         1998         1997
                            ------------ ------------ ------------ ------------
<S>                         <C>          <C>          <C>          <C>
Basic:
 Weighted average shares
  outstanding for the
  period..................       43,822       42,768       43,602       41,912
                            ------------ ------------ ------------ ------------
 Shares used in computing
  per share amounts.......       43,822       42,768       43,602       41,912
                            ============ ============ ============ ============
 Net income (loss)
  available for common
  stockholders............     ($12,354)     $20,470     ($10,757)     $54,903
                            ============ ============ ============ ============
 Net income (loss)
  available for common
  stockholders per share..       ($0.28)       $0.48       ($0.25)       $1.31
                            ============ ============ ============ ============
Diluted (1):
 Weighted average shares
  outstanding for the
  period..................       43,822       42,768       43,602       41,912
 Net effect of dilutive
  stock options based on
  the treasury stock
  method using average
  market price............         --          2,647         --          2,885
 Assumed conversion of
  5 3/4% convertible
  subordinated notes......         --          9,684         --          9,684
                            ------------ ------------ ------------ ------------
 Shares used in computing
  per share amounts.......       43,822       55,099       43,602       54,481
                            ============ ============ ============ ============
 Net income (loss)
  available for common
  stockholders............     ($12,354)     $20,470     ($10,757)     $54,903
  subordinated note
 Add 5 3/4% convertible
  subordinated note
  interest, net of
  interest capitalized
  and income tax effect...         --          1,841         --          4,717
                            ------------ ------------ ------------ ------------
 Net income (loss)
  available for common
  stockholders............     ($12,354)     $22,311     ($10,757)     $59,620
                            ============ ============ ============ ============
 Net income (loss)
  available for common
  stockholders per share..       ($0.28)       $0.40       ($0.25)       $1.09
                            ============ ============ ============ ============
</TABLE>
(1) Diluted EPS for the three and nine months ended Decenber 31, 1998 does not
    assume conversion of the Company's 5 3/4% convertible subordinated notes,
    as the effect would be anti-dilutive.


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 below and in the Company's Annual Report on 
Form 10-K for the year ended March 31, 1998, 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 December 31, 1997 and 1998.  Net sales for 
the three months ended December 31, 1998 were $69.8 million, down 29.2% 
from the $98.6 million reported in the three months ended December 31, 
1997. For the first nine months of fiscal 1999, net sales of $183.6 
million were $82.3 million, or 31.0% lower than the same period in 
fiscal 1998.  Unit sales volume decreased 17.2% during the three months 
ended December 31, 1998, while average selling prices declined 14.5%, 
compared to the three months ended December 31, 1997. The decrease in 
unit sales volume during the three months ended December 31, 1998 was 
attributable to continuing 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 a decline in average selling prices.  Future 
sales will depend largely upon customer demand, unit shipments and 
production volumes.

During the three months ended December 31, 1998 and 1997, four 
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 10.3% of net sales for the three 
months ended December 31, 1998, compared with 37.6% for the three months 
ended December 31, 1997. The decline in gross margin during the three 
months ended December 31, 1998 was primarily a result of higher unit production
costs and the decline in average selling prices versus the comparable  period
in fiscal 1998. Additionally the Company recorded a $2.3 million  charge for
inventory revaluation (included in cost of sales).  Third  quarter unit
production costs rose as fixed costs were absorbed over  lower unit production
volumes. Production volumes decreased 35% in the third quarter of fiscal 1999,
compared with the third quarter of fiscal  1998. The increase in unit
production cost, caused by lower production  volumes was partially offset by
reduced salaries, as the Company  responded to lower demand by implementing a
restructuring plan during the third quarter of fiscal 1999.   Under this
plan, the Company reduced it's workforce  by approximately 300 employees and
eliminated third quarter fiscal 1999 bonuses for all of the  Company's
personnel. 


Research and Development. Research and development expenses increased 
$139,000 in the three months ended December 31, 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 and expanded research efforts to support the 
Company's expanded programs.

Selling, General and Administrative. Selling, general and  administrative
expenses increased $648,000 in the three months ended  December 31, 1998,
compared to the same period in the prior fiscal year.  During the third quarter
of fiscal 1999, the Company recorded a $1.5  million charge for uncollectible
receivables (included in selling,  general and administrative expenses).
Excluding this charge, selling  general and administrative expenses decreased
$852,000.  This decrease  in selling, general and administrative expenses was
primarily a result  of lower headcount and reduced salaries as the Company
responded to  lower demand by implementing a restructuring plan which
eliminated  certain administrative positions and all third quarter fiscal 1999
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.

Restructuring Charge
During the third quarter of fiscal 1999, the Company announced and 
completed a restructuring plan, which included a work force reduction of 
approximately 300 employees and the consolidation of the Company's 
manufacturing operations.  The plan was primarily aimed at improving 
costs efficiencies by retiring older equipment and eliminating excess 
capacity. The Company recorded a total charge of $15.7 million, which 
included a non-cash charge of $13.7 million for equipment and related spare
parts taken out of  service during the quarter.  The restructuring charge also
included a  charge of $1.8 million for severance costs, which were paid in full
during  the third fiscal quarter, and a provision of $200,000 for contract
services in connection with the restructuring plan.

Interest Expense, Net. Net interest expense increased $634,000 during 
the three months ended December 31, 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 December 31, 
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 $11.8 million to $36.8 million  at
December 31, 1998 from $24.9 million at March 31, 1998. Cash flows  from
operations were $46.9 million for the nine-month period ended  December 31,
1998 as compared to $80.6 million in the comparable period  of 1997. Cash
generated during the nine months ended December 31, 1998  reflected net income
adjusted for non-cash changes including depreciation and amortization and
equipment writedowns (taken as a result of the restructuring change) and a
decrease in receivables offset by an increase in inventories and a decrease in
accounts  payable and accrued liabilities.  Decreased sales and lower margins
contributed to the decline in positive cash flow provided by operations during
the nine months ended December 31, 1998 as compared  to the nine months ended
December 31, 1997.

The Company invested $36.9 million and $105.5 million in property, 
plant and equipment during the nine months ended December 31, 1998 and 
1997, respectively. The Company currently expects to spend approximately 
$50 million over the next twelve months on property, plant & equipment.

Cash used by financing activities for the first nine months of fiscal 
1999 reflected $2.5 million in principal payments on capital leases, 
offset by $3.3 million in cash received for employee stock purchases.

As of December 31, 1998, the Company's principal sources of liquidity 
consisted of cash, cash equivalents and short-term investments, as well 
as the full balance of the $50 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 anticipated capital 
expenditures at least through December 31, 1999. Should improved market 
conditions result in a need for a substantial expansion in the Company's 
manufacturing capacity, the Company may need 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 that will be affected.  In the ordinary course of 
replacing computer equipment and software, the Company attempts to obtain 
replacements that are Year 2000 compliant. Utilizing both internal and 
external resources to identify and assess needed Year 2000 remediation, 
the Company currently anticipates that its internal Year 2000 
identification, assessment, remediation and testing efforts, which began 
in October 1997, will be completed on or about June 30, 1999, and that 
such efforts will be completed prior to any currently anticipated impact 
on its internal computer equipment and software. 

 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 of the Company.  However, if such 
modifications and conversions are not made, or not completed on a timely 
basis, the Year 2000 issue could have a material  adverse effect on the 
Company.  Furthermore, the costs of such conversions and updates are 
based on estimates, which are derived utilizing numerous assumptions of 
future events, including, but not limited to, the availability and cost 
of personnel trained in this area, the ability to locate and correct all 
relevant computer code and similar uncertainties.  There can be no 
assurance that the Company will be able to upgrade any or all  of its 
major systems or, once upgraded, that the systems will be Year 2000 
compliant.  Should the  Company fail to upgrade such systems in a timely 
manner, or should those  upgrades fail to be Year 2000 compliant, the 
Company may be unable to conduct  business or manufacture its products, 
which could cause a material adverse effect on the Company. 

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 or products of other companies or significant 
suppliers will be Year 2000 compliant.   A failure to take appropriate 
remediation measures by another company, or remediation that is 
incompatible with the Company's systems, could have a material adverse 
effect on the Company.  As of December 15, 1998, the Company had 
received responses from approximately 70% of such third parties, and 95% 
of the companies that have responded have provided written assurances 
that they expect to address all their significant Year 2000 issues on a 
timely basis. 

The Company is currently working with its customers and suppliers, to 
address their Year 2000 compliance in a timely manner.  The Company 
anticipates completion of this effort on or about June 30, 1999; however,
should  the Company's customers or suppliers fail to address Year 2000 issues,
the Company could be adversely affected.  Should any of the Company's  
suppliers encounter Year 2000 problems that cause them to delay  manufacturing 
or shipments of key components, the Company may be forced  to delay  or cancel
shipments of its products, which could have a  material adverse  effect on the
Company.  Additionally, any inability of  customers to become Year 2000
compliant which would cause them  to delay  or cancel substantial purchase
orders or delivery of  products could also  have a material adverse effect on
the Company. 

Currently, the Company does not have a contingency plan in place should 
the Company be unsuccessful in its efforts to become Year 2000 compliant.   
However, the Company intends to create such a contingency plan by July 
1999.




Part II  Other Information

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

                Not applicable

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 on Form 8-K

(b) Reports on Form 8-K:

During the quarter ended December 31, 1998, the Company did not file 
any reports on Form 8-K.


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:   February 1, 1999                BY:  /s/ Peter S. Norris        

                                                Peter S. Norris
                                                Vice President and
                                                Chief Financial Officer


Date:   February 1, 1999                BY:  /s/ Ronald L. Schauer      

                                                Ronald L. Schauer
                                                President and
                                                Chief Executive Officer




































EXHIBIT INDEX

(a)  Exhibits:

Exhibit No.
  10.69           Revolving Credit Agreement

  27.1            Financial Data Schedule.