8/12/97
              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 period ended June 28, 1997.

       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 0-14016


                       MAXTOR CORPORATION
     (Exact name of registrant as specified in its charter)

                Delaware                      77-0123732
(State or other jurisdiction of             (I.R.S. Employer
incorporation or organization)               Identification No.)

510 Cottonwood Drive, Milpitas, CA                95035
(Address of principal executive offices)        (Zip Code)



                      (408) 432-1700
        Registrant's telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 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.

                   X     Yes                  No
               -----                     -----

No shares of Common Stock and 58,208,955 shares of Series A
Preferred Stock were issued and outstanding as of August 11,
1997.



                            MAXTOR CORPORATION
                                
                               FORM 10-Q
                                
                              June 28,1997
                                
                                    INDEX
                                
                                
                                
Part  I. Financial
Information                                                 Page
------------------                                          -----

 Item 1.  Consolidated Financial Statements

          Consolidated Statements of Operations -
            Three Months and Six Months Ended
            June 28, 1997 and June 29, 1996                  3

          Consolidated Balance Sheets-
            June 28, 1997 and December 28, 1996             4 -5

          Consolidated Statements of Cash Flows-
            Six Months Ended June 28, 1997
            and June 29, 1996                               6 -7

          Notes to Consolidated Financial Statements        8 - 9


 Item 2.  Management's Discussion and Analysis of
          Financial Condition and Results of Operations    10 - 14



Part  II. Other Information

 Item 1.  Legal Proceedings                                   15

 Item 6.  Exhibits and Reports on Form 8-K                    15



  Signature Page                                              16



                 PART   I. FINANCIAL INFORMATION


Item 1.      CONSOLIDATED FINANCIAL STATEMENTS



                        MAXTOR CORPORATION
               CONSOLIDATED STATEMENTS OF OPERATIONS
                         (In thousands)
                          (Unaudited)

                          Three Months Ended      Six Months Ended
                          -------------------     ----------------

                          June 28,   June 29,     June 28,   June 29,
                            1997       1996         1997       1996
                          --------   --------     --------   -------

Revenue                   $273,976   $255,968    $512,018   $566,555
Revenue from affiliates      9,118      5,370      18,084      9,741
                          --------   --------     --------   -------
  Total revenue            283,094    261,338     530,102    576,296

Cost of revenue            271,968    328,351     517,830    627,362
Cost of revenue from
  affiliates                 8,359      5,415      16,613      9,317
                          --------   --------     --------   -------
  Total cost of revenue    280,327    333,766     534,443    636,679

Gross profit                 2,767    (72,428)     (4,341)   (60,383)
                          --------   --------     --------   -------

Operating expenses:
  Research and
  development               25,523     28,806      51,917     54,107
  Selling, general
  and  administrative       15,347     24,244      30,408     46,418
                          --------    -------     --------   --------
Total operating expenses    40,870     53,050      82,325    100,525

Loss from operations       (38,103)  (125,478)    (86,666)  (160,908)

Interest expense            (8,697)    (4,768)    (16,624)    (8,789)
Interest income                416        289       2,197        622
                          ---------   --------    --------   --------

Loss before provision
 for income taxes          (46,384)  (129,957)   (101,093)   (169,075)
Provision for income taxes     224        232         501         931
                          ---------   --------    --------   ---------
Net loss                  $(46,608) $(130,189)  $(101,594)  $(170,006)





                         See accompanying notes.




                            MAXTOR CORPORATION
                       CONSOLIDATED BALANCE SHEETS
                            (In thousands)
                              (Unaudited)
                                          June 28,         December 28,
                                            1997              1996
                                      ------------       --------------

ASSETS

Current assets:
  Cash and cash equivalents               $33,992             $31,313
  Accounts receivable, net of 
     allowance for doubtful accounts
     of $4,376 at June 28, 1997 and
     $5,255 at December 28, 1996          141,570              82,876
  Accounts receivable from affiliates       2,455               6,248
  Inventories:
     Raw materials                         29,360              33,012
     Work-in-process                       21,905              15,674
     Finished goods                        77,461              32,192
                                      ------------        --------------
                                          128,726              80,878
  Prepaid expenses and other                4,472               5,239
                                      ------------        --------------
       Total current assets               311,215             206,554

Property, plant and equipment, at cost:
  Buildings                                32,186              29,512
  Machinery and equipment                 208,026             194,644
  Furniture and fixtures                   10,998              13,300
  Leasehold improvements                   10,120              12,695
                                      -----------         -------------
                                          261,330             250,151
  Less accumulated depreciation
    and amortization                     (156,395)           (158,078)
                                      ------------        -------------
     Net property, plant and equipment    104,935              92,073
Other assets                               13,755              15,912
                                      -------------         -----------
                                         $429,905            $314,539



                            See accompanying notes.
                           





                             MAXTOR CORPORATION
                         CONSOLIDATED BALANCE SHEETS
                (In thousands, except share and per share amounts)

                                (Continued)
                                (Unaudited)

                                         June  28,       December 28,
                                           1997             1996
                                       ------------     -------------

LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:
  Short-term borrowings                  $159,170           $149,800
  Short-term borrowings due to 
    affiliates                            185,000                  -
  Accounts payable                        150,968            109,956
  Accounts payable to affiliates           16,453             13,459
  Income taxes payable                      5,058              5,088
  Accrued payroll and payroll-related
    expenses                               20,898             17,159
  Accrued warranty                         15,673             20,194
  Accrued expenses                         76,629             97,166
  Long-term debt and capital lease
    obligations due within one year         5,029                 71
                                      ------------        ------------
       Total current liabilities          634,878            412,893

Long-term debt and capital lease
 obligations due after one year           224,084            229,109
Commitments and contingencies                   -                  -
Stockholder's deficit:
  Series A Preferred stock, $0.01 par
     value, 95,000,000 shares
     authorized; 58,208,955 shares
     issued and outstanding at June 28,
     1997 and December 28, 1996;
     aggregated liquidation value of
     $390,000                                 582                582
  Common stock, $0.01 par value, 
     110,000,000 shares authorized; no
     shares issued and outstanding at
     June 28, 1997 and December 28, 1996        -                  -
  Additional paid-in capital              335,017            335,017
  Accumulated deficit                    (764,656)          (663,062)
                                      -------------        ------------

       Total stockholder's deficit       (429,057)          (327,463)
                                      -------------        ------------
                                      $   429,905          $ 314,539

                                
                                

                    See accompanying notes.
                    




                        MAXTOR CORPORATION
               CONSOLIDATED STATEMENTS OF CASH FLOWS
                         (In thousands)
                           (Unaudited)

                                               Six Months Ended
                                    --------------------------------------
                                             June 28,          June 29,
                                               1997             1996
                                          --------------     ------------
Increase (decrease) in cash and cash
   equivalents
Cash flows from operating activities:
  Net loss                                   $(101,594)        $(170,006)
  Adjustments to reconcile net loss to
    net cash used in operating activities:
     Depreciation and amortization              26,244            30,472
     Inventory reserves for lower of cost
       or market                                (3,295)           42,338
     Gain on sale of subsidiary                      -            (2,385)
     Other                                        (425)              633
     Change in assets and liabilities:
       Accounts receivable                     (35,280)           49,137
       Accounts receivable from affiliates       3,793            (2,979)
       Net collections of accounts receivable
            sold to financing company          (42,239)           36,144
       Inventories                             (45,756)          (67,048)
       Prepaid expenses and other                  767                17
       Accounts payable                         25,358            11,298
       Accounts payable to affiliates            2,994            11,504
       Income taxes payable                        (30)           (1,347)
       Accrued payroll and 
          payroll-related expenses               3,739             5,310
       Accrued warranty                         (4,521)           (4,746)
       Accrued expenses                           (509)              465
                                             ------------        ----------
  Total adjustments                             (69,160)         108,813
                                             ------------        ----------
  Net cash used in operating activities        (170,754)         (61,193)
                                           ---------------    ---------------

Cash flows from investing activities:
  Proceeds from sale of subsidiary                    -           25,000
  Purchase of property, plant and equipment     (23,955)         (47,842)
  Proceeds under note receivable from supplier    1,476                -
  Other                                           1,606           (5,932)
                                              -----------        -----------
  Net cash used in investing activities         (20,873)         (28,774)

Cash flows from financing activities:
  Proceeds from issuance of short-term 
     borrowings                                 194,370           77,310
  Principal payments on short-term borrowings         -          (1,291)
  Principal payments on debt, 
     including capital lease obligations            (64)           (112)
  Proceeds from issuance of common stock, net of
     notes receivable and stock repurchases           -            1,492
                                                ---------         -------
  Net cash provided by financing activities      194,306          77,399

Net change in cash and cash equivalents            2,679         (12,568)

Cash and cash equivalents at beginning 
     of period                                    31,313          41,366
                                              -----------        -----------

Cash and cash equivalents at end of period      $ 33,992        $ 28,798


                                See accompanying notes.



                                MAXTOR CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (In thousands)
                                   (Unaudited)

                                                   Six Months Ended
---------------------------------------------------------------------------
                                                   June 28,  June 29,
                                                      1997      1996
--------------------------------------------------------------------------

Supplemental disclosures of cash flow information:
Cash paid for:
 Interest                                          $ 11,885    $ 7,283
 Income taxes                                           514        136

Supplemental information on non-cash investing and financing activities:
Purchase of property, plant and equipment 
    financed by accounts payable                     15,654      2,334 
Exchange of Common Stock for 
    Series A Preferred Stock                              -        582
--------------------------------------------------------------------------



See accompanying notes.




                              MAXTOR CORPORATION
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)

1.   Consolidated financial statements

The  accompanying unaudited consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and
do  not  include all of the information and footnotes required  by
generally  accepted  accounting principles for complete  financial
statements.   The  consolidated financial statements  include  the
accounts  of  Maxtor Corporation (Maxtor or the Company)  and  its
wholly-owned    subsidiaries.    All   significant    intercompany
transactions  have  been  eliminated  in  consolidation.    Maxtor
Corporation  operates  as  a wholly-owned  subsidiary  of  Hyundai
Electronics  America (HEA).  Accordingly, no  earnings  per  share
information  is disclosed.  All adjustments of a normal  recurring
nature  which, in the opinion of management, are necessary  for  a
fair  statement of the results for the interim periods  have  been
made.  It is recommended that the interim financial statements  be
read  in  conjunction  with  the  Company's  audited  consolidated
financial  statements and notes thereto for the fiscal year  ended
December 28, 1996.  Interim results are not necessarily indicative
of  the operating results expected for later quarters or the  full
fiscal year.


2.   Short-term borrowings

On March 30, 1996, the Company entered into an accounts receivable
securitization program with Citicorp Securities, Inc.  Under  this
program,  the  Company  can  sell  its  qualified  trade  accounts
receivable up to $100 million on a non-recourse basis.   The  face
amount  of  the eligible receivables are discounted based  on  the
Capital Receivables Corporation commercial paper rate (5.63% as of
June  28, 1997) plus commission and is subject to a 10% retention.
As   of  June  28,  1997,  $61.5  million  in  sales  of  accounts
receivable,  for  which proceeds had not yet been  received,  were
included  in  accounts receivable and $35.6 million in collections
of  accounts receivable not yet remitted were included in  accrued
and other liabilities.

The  Company has two unsecured, revolving lines of credit totaling
$225   million  (the  Facilities)  through  Citibank,   N.A.   and
syndicated  among fifteen banks. The Facilities are guaranteed  by
Hyundai  Electronics Industries Co., LTD (HEI).  A  total  of  $96
million of the Facility is a 364-day committed facility, renewable
annually  at  the option of the syndicate banks.  The facility  is
used  primarily for general operating purposes and bears  interest
at  a rate based on LIBOR plus 0.53 percent.  As of June 28, 1997,
$96   million  of  borrowings  under  this  line  of  credit  were
outstanding.  A total of $129 million of the Facilities is a three
year  committed facility that is also  used primarily for  general
operating  purposes and bears interest at a rate  based  on  LIBOR
plus  0.53  percent.   As  of  June  28,  1997,  $129  million  of
borrowings under this facility were outstanding.

From  September  30, 1996 to June 28, 1997, the  Company  obtained
credit  facilities amounting to $50 million in the aggregate  from
three banks. The facilities, which are guaranteed by HEI, are used
primarily  for general operating purposes and bear interest  at  a
rate ranging from 5.97 to LIBOR plus 0.60 percent.  As of June 28,
1997, $50 million of borrowings under these credit facilities were
outstanding.

On  April  10, 1997, the Company obtained a $150 million  line  of
credit  from HEA which replaced all previous HEA lines.   In  June
1997, this line was amended, increasing the line of credit to $185
million.   As  of  June  28, 1997, $185 million  was  outstanding.
Interest is paid quarterly at approximately 6.5%.

Under the terms of the Company's line of credit facilities, the
Company may not declare or pay any dividends without the prior
consent of its lenders.


3.   Contingencies

On  December  20,  1996, the Company filed an action  in  Colorado
District  Court, County of Boulder, against StorMedia,  Inc.,  its
subsidiary, StorMedia International, Ltd. and its Chief  Executive
Officer,  William J. Almon.  This action, which arose  out  of  an
agreement for the purchase of media by the Company from StorMedia,
was stayed in March 1997.

The  Company has been notified of certain other claims, including
claims  of  patent infringement.  While the ultimate  outcome  of
such  claims is not determinable, it is reasonably possible  that
an  adverse resolution of certain of these matters could  have  a
material impact on the financial condition, results of operations
or  cash  flows of the Company. This statement should be read  in
conjunction with "PART I, Item 1. Patents and Licenses"  included
in  the  Company's Annual Report on Form 10-K for the year  ended
December 28, 1996.

4.     Sale of Subsidiary

In  May  1996,  the Company entered into an agreement  to  sell  a
majority  interest  in International Manufacturing  Services,  Inc
(IMS) to certain IMS management and other investors ("Buyer").  At
completion  of the transaction in June 1996, the Company  received
$25  million  in  cash  and $20 million in  notes  from  IMS,  and
retained  a  23.5% ownership interest in IMS. As a result  of  the
transaction, the IMS consolidated financial position at  June  29,
1996  reflected  a  stockholders'  deficit  of  approximately  $14
million.  Therefore, the Company has written  down  its  remaining
equity interest in IMS to zero. In addition, given the stockholder
deficit  of  IMS  and  the subordination of  the  Company's  notes
receivable  from  IMS to bank debt of IMS, combined  with  certain
specified conditions which must be achieved before any payment  of
principal  will  occur, the Company has fully reserved  its  notes
from IMS.

5.     Derivatives

The  Company  uses  forward foreign exchange  contracts  to  hedge
certain  assets  denominated  in  foreign  currencies.  For  these
instruments, risk reduction is assessed on a transaction basis and
the  instruments are designed as, and effective as a hedge and are
highly  inversely  correlated to the hedged item  as  required  by
generally  accepted  accounting principles. Gains  and  losses  on
these hedges are included in the carrying amount of the assets and
are  ultimately  recognized in income as part  of  those  carrying
amounts. If a hedging instrument ceases to qualify as a hedge, any
subsequent  gains and losses are recognized currently  in  income.
The   Company  does  not  use  any  derivatives  for  trading   or
speculative purposes. If a derivative ceases to qualify for  hedge
accounting, it is accounted for on a mark to market basis.

6.    Recent Accounting Pronouncements

In  June  1997,  the Financial Accounting Standards  Board  issued
Statement  of Financial Accounting Standards No. 130  (SFAS  130),
Reporting   Comprehensive  Income.  This   statement   establishes
requirements  for disclosure of comprehensive income  and  becomes
effective  for  the  Company  for  fiscal  years  beginning  after
December  15,  1997,  with reclassification of  earlier  financial
statements   for   comparative  purposes.   Comprehensive   income
generally  represents all changes in stockholders'  equity  except
those resulting from investments or contributions by stockholders.
The  Company is evaluating alternative formats for presenting this
information, but does not expect this pronouncement to  materially
impact the Company's results of operations.

In  June  1997,  The Financial Accounting Standards  Board  issued
Statement  of Financial Accounting Standards No. 131  (SFAS  131),
Disclosures   about   Segments  of  an  Enterprise   and   Related
Information.  This statement establishes standards for  disclosure
about  operating  segments  in  annual  financial  statements  and
selected  information  in  interim  financial  reports.  It   also
establishes  standards for related disclosures about products  and
services,  geographic  areas and major customers.  This  statement
supersedes  Statement of Financial Accounting  Standards  No.  14,
Financial Reporting for Segments of a Business Enterprise. The new
standard  becomes  effective  for  fiscal  years  beginning  after
December 15, 1997, and requires that comparative information  from
earlier  years be restated to conform to the requirements of  this
standard. The Company is evaluating the requirements of  SFAS  131
and  the  effects, if any, on the Company's current reporting  and
disclosures.
This  report includes a number of forward-looking statements which
reflect the Company's current views with respect to future  events
and  financial  performance. These forward-looking statements  are
subject  to  certain  risks  and  uncertainties,  including  those
discussed  in  Item 2. Management's Discussions  and  Analysis  of
Financial Condition and "-Results of Operations", "-Gross Margin",
"-Liquidity and Capital Resources", and elsewhere in this  report,
that   could  cause  actual  results  to  differ  materially  from
historical  results  or those anticipated.  In  this  report,  the
words  "anticipates", "believes", "expects",  "intends",  "future"
and   similar  expressions  identify  forward-looking  statements.
Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of the date hereof.


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

The  following discussion should be read in conjunction  with  the
consolidated financial statements and notes thereto.


RESULTS OF OPERATIONS

QUARTER ENDED JUNE 28, 1997 COMPARED TO QUARTER ENDED JUNE 29, 1996

                      Three Months Ended        Six Months Ended
------------------------------------------------------------------------
(In millions)          June 28,  June 29,        June 28, June 29,
Fiscal  quarter ended    1997    1996    Change    1997   1996    Change
------------------------------------------------------------------------

Revenue              $283.1   $ 261.3    $21.8   $530.1  $576.3  $(46.2)

Gross profit         $  2.8   $(72.4)   $ 75.2   $(4.3) $(60.4)  $ 56.1
     As a percentage 
     of revenue         1.0%  (27.7%)             (0.8%) (10.5%)

Net loss             $(46.6)  $(130.2)  $83.6   $(101.6) $(170.0) $68.4
     As a percentage 
     of revenue       (16.5%)  (49.8%)          (19.2%)   (29.5%)

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



Revenue
Revenue  for  the  quarter  ended June  28,  1997  increased  8.3%
primarily  due  to a shift in product mix to the Company's  higher
capacity  products. Unit volumes also increased by 26% versus  the
quarter ended June 29, 1996. Over 80% of the Company's unit volume
for  the quarter comprised drives with a capacity of 1.6 gigabytes
(GB)  or  higher, whereas the Company's unit volume for  the  same
quarter  in  the  prior  year primarily comprised  drives  with  a
capacity  of 1.6GB or less. Revenue for the six months ended  June
28,  1997 decreased 8.0% when compared to the same period  of  the
prior year due primarily to lower volumes in the first quarter  of
the  current  year, not offset entirely by higher volumes  in  the
second quarter.

During  the three and six months ended June 28, 1997, one customer
accounted  for 26% and 28% of the Company's revenue, respectively.
During the quarter ended June 29, 1996, one customer accounted for
over 10% of the Company's revenue.

Gross margin
Gross  margin as a percentage of revenue improved in  the  quarter
ended  June 28, 1997 compared to the quarter ended June 29,  1996.
As a result of the introduction of new products during the year of
1997,  the  Company's gross margin for the three  and  six  months
ended  June 28, 1997 increased dramatically as compared  with  the
same  period a year ago.  This improvement is due to new  products
with   better   performance  which  result   in   higher   prices.
Additionally,  margins were affected by reserves for  costs  lower
than  sales  prices of $42.3 million in the first  six  months  of
1996.

The  Company  continues  its efforts to reduce  its  average  unit
manufacturing costs however, the Company expects the industry will
continue  to  be characterized by price competition. In  the  next
three  to  six  months,  pricing  pressures  may  be  higher  than
experienced  in  the past year. Any aggressive  pricing  moves  by
competitors tend to have negative impacts on gross margins for the
industry as a whole, including the Company's gross margins.

Operating expenses
                      Three Months Ended          Six Months Ended
------------------------------------------------------------------------
(In millions)       June 28,   June 29,        June 28, June 29,
Fiscal quarter ended  1997      1996   Change    1997    1996    Change
------------------------------------------------------------------------

Research and 
   development       $ 25.5   $ 28.8  $ (3.3)   $ 51.9  $54.1   $(2.2)
     As a percentage 
     of revenue         9.0%    11.0%              9.8%   9.4%

Selling, general and 
   administrative    $ 15.3   $ 24.2  $ (8.9)   $ 30.4   $46.4  $(16.0)
     As a percentage 
     of revenue         5.4%    9.3%               5.7%    8.1%

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

Research  and development (R&D) expenses decreased for  the  three
and  six months ended June 28, 1997 primarily as a result  of  the
Company's  continued  emphasis on cost  containment.  The  Company
intends to continue making substantial investments in research and
development since the timely introduction and transition to volume
production  of new products is an essential factor in management's
efforts to restore it to profitability.

Selling, general and administrative (SG&A) expenses decreased as a
percentage of revenue and in absolute dollars due to the Company's
ongoing  efforts to control costs. Reductions in overall headcount
and  controlled  marketing expenses contributed to lower  expenses
for the three and six months ended June 28, 1997.


Interest expense and interest income
                      Three Months Ended          Six Months Ended
--------------------------------------------------------------------------
(In millions)        June 28,  June 29,          June 28,  June 29,
Fiscal quarter ended   1997     1996    Change     1997     1996   Change
--------------------------------------------------------------------------

Interest expense      $8.7     $4.8      $3.9      $16.6    $8.8    $7.8

Interest income       $ .4     $ .3      $ .1      $2.2     $ .6    $1.6

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

Interest expense increased due to a substantial increase in short-
term  and  long-term  borrowings required in  order  to  fund  the
Company's  operations.  The Company had $344.2 million  of  short-
term  and  $129  million of long-term lines of  credit  borrowings
outstanding  at  June 28, 1997, compared with  $278.8  million  of
total  borrowings  outstanding at  June  29,  1996.   The  Company
expects  to  maintain approximately the same or higher  levels  of
borrowings for the remainder of the year.

Interest income increased slightly due to the availability of cash
for  investing purposes. Income for the six months ended June  28,
1997  increased  substantially over 1996 due to payments  received
under  notes  receivable  from  a  former  subsidiary  that   were
recognized on the recovery basis.


Provision for income taxes
                            Three Months Ended         Six Months Ended
-----------------------------------------------------------------------
(In millions)           June 28, June 29,        June 28, June 29,
Fiscal  quarter ended     1997    1996   Change      1997   1996  Change
-----------------------------------------------------------------------

Provision for 
   income taxes           $0.2   $0.2    $ 0.0    $ 0.5    $0.9  $(0.4)

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

The provision for income taxes consists primarily of foreign taxes.  The
decrease of $.4 million for the six month comparative periods is due to
the elimination of taxes in Hong Kong as a result of the June 1996 sale
of a subsidiary.  The Company's effective tax rate for fiscal years 1997
and 1996 differs from the combined federal and state rates due to the
repatriation of foreign earnings absorbed by current year losses, and
the Company's U.S. operating losses and valuation of temporary
differences not providing current tax benefits, offset in part by the
tax savings associated with the Company's Singapore operations.  Income
from the Singapore operations is not taxable in Singapore as a result of
the Company's pioneer tax status.

LIQUIDITY AND CAPITAL RESOURCES

------------------------------------------------------------------------
                              As of and for          As of and for
                           the six months ended   the six months ended
(In millions)                 June 28, 1997          June 29, 1996
------------------------------------------------------------------------

Cash and cash equivalents          $ 34.0                 $ 28.8

Short-term borrowings              $159.2                 $109.8

Short-term  borrowings  
   due  to  affiliate              $185.0                 $ 65.0

Net  cash  used  in  
   operating activities            $170.8                 $ 61.2

Net cash used in 
   investing activities            $ 20.9                 $ 28.8

Net  cash  provided by 
   financing  activities           $194.3                 $ 77.4

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


As  of June 28, 1997, the Company had cash and cash equivalents of
$34.0  million  as compared to $31.3 million as  of  December  28,
1996,  an  increase of $2.7 million. The increase in the Company's
cash  and  cash  equivalents  was  primarily  the  result  of  the
slightest  excess  of credit borrowing over operating  losses  and
capital expenditures.

Net cash used in operating activities during the six months ending
June  28,  1997  was primarily attributable to the net  loss  from
operations  net  of  non-cash depreciation  and  amortization,  an
increase  in  accounts receivable and inventories offset  by  cash
provided  by  increases  in  accounts payable  and  other  current
liabilities.  Other significant uses of cash during the six months
ended  June  28,  1997 were $24.8 million in capital  expenditures
related  primarily to acquisition of manufacturing and engineering
equipment to develop new products and enhance productivity of  the
Singapore manufacturing facility.  Funding these uses of cash, the
Company  drew down $194 million on its credit facilities.   Credit
lines are discussed at length below.

The  Company has a credit facility in the amount of $13.8  million
to  be  used  for capital equipment requirements at the  Singapore
facility.   This  credit facility is guaranteed  by  HEI  and  was
extended  for  one  year under similar terms  with  principal  and
interest due on January 30, 1998.

The  Company has two unsecured, revolving lines of credit totaling
$225   million  (the  Facilities)  through  Citibank,   N.A.   and
syndicated  among fifteen banks. The Facilities are guaranteed  by
HEI.   A  total  of  $96  million of the  Facility  is  a  364-day
committed  facility,  renewable annually  at  the  option  of  the
syndicate  banks  and expiring August 28, 1997.  The  facility  is
used  primarily for general operating purposes and bears  interest
at  a rate based on LIBOR plus 0.53 percent.  As of June 28, 1997,
$96   million  of  borrowings  under  this  line  of  credit  were
outstanding.  A total of $129 million of the Facilities is a three
year  committed facility that is also  used primarily for  general
operating  purposes and bears interest at a rate  based  on  LIBOR
plus  0.53  percent.   As  of  June  28,  1997,  $129  million  of
borrowings under this line of credit were outstanding.

The  Company has credit facilities amounting to $50 million in the
aggregate  from three banks. The facilities, which are  guaranteed
by HEI, are used primarily for general operating purposes and bear
interest  rates  ranging  from 5.97 percent  to  LIBOR  plus  0.65
percent.   As  of  June 28, 1997, $50 million of borrowings  under
this line of credit were outstanding.

On  April 10, 1997, the Company renewed its intercompany  line  of
credit from HEA for $185 million.  This line of credit allows  for
draw downs up to $185 million and interest is payable quarterly at
approximately  6.5%.   As  of  June 28,  1997,  $185  million  was
outstanding.

The  liquidity  of the Company continued to be adversely  affected
during  the  six months ended June 28, 1997 by significant  losses
from  operations  and  liquidity has  been  significantly  reduced
compared   to  the  same  period  last  year.   The   Company   is
implementing  ongoing measures with the goal of decreasing  losses
from  operations  and thus improving liquidity.   In  addition  to
attempting  to improve operating margins on product sales  through
the  introduction  of new products and reduction of  manufacturing
costs,  the Company remains focused on controlling other operating
expenses.  However, the Company believes that it must continue  to
make  substantial investments in R&D since the timely introduction
and  transition to volume production of new products is  essential
to its future success.

The  Company expects that it will require alternative  sources  of
liquidity,  including  additional sources  of  financing  for  the
remainder  of 1997.  The Company is engaged in ongoing discussions
with  various  parties, including HEI, HEA and  certain  financial
institutions regarding renewed or additional sources of financing,
including  an  additional infusion of equity from  HEA,  which  is
subject to various contingencies including approval by the Bank of
Korea.   While  the  Company believes that additional  sources  of
financing  will  be  available, there can  be  no  assurance  that
financing  will be available on terms which are favorable  to  the
Company.

Subject to unforeseen changes in general business conditions,  the
Company  believes  that the combination of the measures  described
above  and other available actions, together with its balances  of
cash  and cash equivalents, equipment financing and line of credit
borrowing capabilities (supported by HEI and HEA) and the expected
equity  infusion, will be sufficient to fund the Company's working
capital  and  capital expenditure requirements  at  least  through
fiscal year 1997.

The  Company  uses  forward foreign exchange  contracts  to  hedge
certain  assets  denominated  in  foreign  currencies.  For  these
instruments, risk reduction is assessed on a transaction basis and
the  instruments are designed as, and effective as a hedge and are
highly  inversely  correlated to the hedged item  as  required  by
generally  accepted  accounting principles. Gains  and  losses  on
these hedges are included in the carrying amount of the assets and
are  ultimately  recognized in income as part  of  those  carrying
amounts. If a hedging instrument ceases to qualify as a hedge, any
subsequent  gains and losses are recognized currently  in  income.
The   Company  does  not  use  any  derivatives  for  trading   or
speculative purposes. If a derivative ceases to qualify for  hedge
accounting, it is accounted for on a mark to market basis.

In  June  1997,  the Financial Accounting Standards  Board  issued
Statement  of Financial Accounting Standards No. 130  (SFAS  130),
Reporting   Comprehensive  Income.  This   statement   establishes
requirements  for disclosure of comprehensive income  and  becomes
effective  for  the  Company  for  fiscal  years  beginning  after
December  15,  1997,  with reclassification of  earlier  financial
statements   for   comparative  purposes.   Comprehensive   income
generally  represents all changes in stockholders'  equity  except
those resulting from investments or contributions by stockholders.
The  Company is evaluating alternative formats for presenting this
information, but does not expect this pronouncement to  materially
impact the Company's results of operations.

In  June  1997,  The Financial Accounting Standards  Board  issued
Statement  of Financial Accounting Standards No. 131  (SFAS  131),
Disclosures   about   Segments  of  an  Enterprise   and   Related
Information.  This statement establishes standards for  disclosure
about  operating  segments  in  annual  financial  statements  and
selected  information  in  interim  financial  reports.  It   also
establishes  standards for related disclosures about products  and
services,  geographic  areas and major customers.  This  statement
supersedes  Statement of Financial Accounting  Standards  No.  14,
Financial Reporting for Segments of a Business Enterprise. The new
standard  becomes  effective  for  fiscal  years  beginning  after
December 15, 1997, and requires that comparative information  from
earlier  years be restated to conform to the requirements of  this
standard. The Company is evaluating the requirements of  SFAS  131
and  the  effects, if any, on the Company's current reporting  and
disclosures.


TRENDS AND UNCERTAINTIES

General
The  Company  competes in the highly cyclical disk drive  industry
and  is  subject  to  a number of risks which  have  affected  the
Company's operating results in the past and may affect its  future
operating  results.  The  industry  is  characterized   by   rapid
technological  change,  intense competition,  short  product  life
cycles, and significant price erosion during a product life cycle.
At  times,  the  industry  is also subject  to  excess  production
capacity and component cost pressures as a result of key component
shortages.  Managing product transitions and bringing products  to
market  in a timely and cost effective manner are critical to  the
success of industry participants, including the Company.  Many  of
the  Company's competitors have had broader product lines than the
Company with which to compete in this environment.

Industry Characteristics
As  with  all companies in the disk drive industry, the  Company's
financial results continue to be heavily dependent on the  success
of  its  products. Competitive areal densities are  continuing  to
increase  dramatically.  Several larger competitors  have  already
focused  their  desktop  drive products on magneto-resistive  (MR)
head technology. MR heads provide more signal than older inductive
head  technologies  at  today's  high  densities.  Currently,  the
Company believes this more aggressive MR-based areal density curve
is  dictating  the  capacities of choice at  major  OEM  accounts.
Additionally,  the Company believes alternative head  technologies
are lagging behind the MR curve by four to six months. Because  of
the  factors  discussed  above, the  Company's  strategy  in  1997
forward   is  centered  on  introducing  desktop  products   which
incorporate   MR  technology  and  which  are  increasingly   less
expensive to manufacture.

Data  storage manufacturers continually strive for larger  storage
capacities, higher performance and lower cost. Short product  life
cycles  also increase the importance of the Company's  ability  to
successfully manage product transitions. During 1996, the  Company
successfully managed certain product transitions. However, certain
new products introduced by competitors, as well as by the Company,
tend  to displace older products. The failure to adequately manage
product   transitions  could  result  in  the   loss   of   market
opportunities, significantly lower gross margins, decreased  sales
of  existing products, cancellation of products or product  lines,
the  accumulation of obsolete and excess inventory, and  resulting
charges  related  to  obsolete capital  equipment.  The  Company's
ability  to anticipate market trends and to successfully  develop,
manufacture in volume and sell new products in a timely manner and
at favorable gross margins will be important factors affecting the
Company's future results.
Manufacturing Characteristics
The  Company's  manufacturing processes require large  volumes  of
leading edge, high-quality components supplied by outside vendors.
Generally,  the Company does not have long-term supply  agreements
with  its vendors. The Company has qualified multiple vendors  for
components  where practical. However, some leading edge components
for the Company's new generation of products may only be available
from  a  limited number of vendors.  The Company has  periodically
received  notices  from vendors that they  are  unable  to  supply
required volumes of certain key components.  Vendor de-commitments
can  adversely  impact the Company's ability to ship  products  as
scheduled  to its customers.  While the Company has qualified  and
continues to qualify multiple vendors for many components,  it  is
reliant  on,  and will continue to be reliant on, the availability
of  supply  from  its  vendors  for many  semi-custom  and  custom
integrated  circuits,  heads,  media  and  other  key  components.
Because  the  Company  is  less  vertically  integrated  than  its
competitors,  an  extended  shortage  of  required  materials  and
supplies could have a more severe effect on the Company's revenues
and  earnings as compared to its competition. In light of  current
industry  conditions, the Company is focused  on  developing  good
business  relationships with its vendors and  utilizing  strategic
alliances for certain components where practical.


                          PART II. OTHER  INFORMATION
                                
Item 1.  LEGAL PROCEEDINGS


On  December  20,  1996, the Company filed an action  in  Colorado
District  Court, County of Boulder, against StorMedia,  Inc.,  its
subsidiary, StorMedia International, Ltd. and its Chief  Executive
Officer,  William J. Almon.  This action, which arose  out  of  an
agreement for the purchase of media by the Company from StorMedia,
was stayed in March 1997.

The  Company has been notified of certain other claims, including
claims  of  patent infringement.  While the ultimate  outcome  of
such  claims is not determinable, it is reasonably possible  that
an  adverse resolution of certain of these matters could  have  a
material impact on the financial condition, results of operations
or  cash  flows of the Company. This statement should be read  in
conjunction with "PART I, Item 1. Patents and Licenses"  included
in  the  Company's Annual Report on Form 10-K for the year  ended
December 28, 1996.


Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

a)Exhibits:
  See Index to Exhibits on pages       to      hereof.
                                  ----    ----

b)Reports on Form 8-K:
  None


                                 SIGNATURE
                                

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


                                   MAXTOR CORPORATION



Date: August  11, 1997                     By:  /s/ Paul J. Tufano
                                           -----------------------
                                                Paul J. Tufano
                                                Vice President, 
                                                Finance and Chief 
                                                Financial Officer