11/10/97
     UNITED STATE 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 September
27, 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 November 10,
1997.



                            MAXTOR CORPORATION
                                
                                FORM 10-Q
                                
                            September 27,1997
                                
                                  INDEX
                                
                                
                                
Part  I.  Financial Information                             Page


   Item 1. Condensed Consolidated Financial Statements

           Condensed Consolidated Statements of Operations -
             Three Months and Nine Months Ended
             September 27, 1997 and September 28, 1996          3

           Condensed Consolidated Balance Sheets-
             September 27, 1997 and December 28, 1996           4

           Condensed Consolidated Statements of Cash Flows-
             Nine Months Ended September 27, 1997
             and September 28, 1996                          5 -6

           Notes to Condensed Consolidated Financial
             Statements                                      7 -8


   Item 2. Management's Discussion and Analysis of
             Condensed Financial Condition and Results
             of Operations                                  9 -13



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.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



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

                             Three Months Ended      Nine Months Ended
                       --------------------------  --------------------------
                       September 27, September 28, September 27, September 28,
                          1997          1996          1997          1996
                       ------------  ------------  ------------  ------------

Revenue                $  383,363    $    276,640  $  895,381     $ 843,195
Revenue from affiliates     8,863           7,859      26,947        17,600
                       ------------  ------------  ------------  ------------
  Total revenue           392,226         284,499     922,328       860,795
                       ------------  ------------  ------------  ------------

Cost of revenue           362,659         282,883     880,489       910,245
Cost of revenue from
   affiliates               8,020           7,973      24,633        17,290
                       ------------  ------------  ------------  ------------
  Total cost of revenue   370,679         290,856     905,122       927,535
                       ------------  ------------  ------------  ------------

Gross profit (Loss)        21,547          (6,357)     17,206       (66,740)
                       ------------  ------------  ------------  ------------

Operating expenses:
   Research and
    development            26,714          30,002      78,631        84,109
   Selling, general and
    administrative         15,536          19,800      45,944        66,218
                       ------------  ------------  ------------  ------------
Total operating expenses   42,250          49,802     124,575       150,327
                       ------------  ------------  ------------  ------------

Loss from operations      (20,703)        (56,159)   (107,369)     (217,067)

Interest expense          (10,856)         (6,355)    (27,480)      (15,144)
Interest income               395             296       2,592           918
                       ------------  ------------  ------------  ------------

Loss before provision
   for income taxes       (31,164)        (62,218)   (132,257)     (231,293)
Provision for income
   taxes                      199             221         700         1,152
                       ------------  ------------  ------------  ------------
Net loss               $  (31,363)   $    (62,439) $ (132,957)   $ (232,445)
                       ------------  ------------  ------------  ------------



                             See accompanying notes.




                              MAXTOR CORPORATION
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In thousands)
                                  (Unaudited)
                                  
                                         September 27,   December 28,
                                            1997            1996
                                         -------------  -------------
ASSETS

Current assets:
     Cash and cash equivalents            $    14,231    $    31,313
     Accounts receivable, net of allowance
        for doubtful accounts of $3,544
        at September 28, 1997 and $5,255
        at December 28, 1996                  323,032        124,806
     Accounts receivable sold not yet
        received                              (99,438)       (41,930)
     Inventories:
        Raw materials                          35,183         33,012
        Work-in-process                        18,299         15,674
        Finished goods                         80,293         32,192
                                          -------------  -------------
                                              133,775         80,878
     Prepaid expenses and other                11,577         11,487
                                          -------------  -------------
             Total current assets             383,177        206,554

Property, plant and equipment, net            103,113         92,073
Other assets                                   13,434         15,912
                                          -------------  -------------
                                          $   499,724    $   314,539
                                          =============  =============


LIABILITIES AND STOCKHOLDER'S DEFICIT

Current liabilities:
     Short-term borrowings                $    94,170    $   149,800
     Short-term borrowings due to affiliate   270,000             -
     Accounts payable                         198,952        109,956
     Accounts payable to affiliates            20,069         13,459
     Accrued payroll and payroll-related
        expenses                               24,953         17,159
     Accrued expenses                          59,135         66,649
     Collection of receivable sold not
        yet remitted                           63,245         55,799
     Long-term debt and capital lease
        obligations due within one year         5,298             71
                                         -------------  -------------
Total current liabilities                     735,822        412,893
                                         -------------  -------------

Long-term debt and capital lease
   obligations due after one year             224,322        229,109
                                         -------------  -------------
Commitments and contingencies                       -              -
Stockholder's deficit:
    Series A Preferred stock                      582            582
    Common stock                                    -              -
    Additional paid-in capital                335,017        335,017
    Accumulated deficit                      (796,019)      (663,062)
                                         -------------  -------------
          Total stockholder's deficit        (460,420)      (327,463)
                                         -------------  -------------   
                                         $    499,724    $   314,539
                                         =============  =============
                                
                                

                    See accompanying notes.
                    




                           MAXTOR CORPORATION
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (In thousands)
                              (Unaudited)

                                                   Nine Months Ended
                                              -------------------------------
                                               September 27,   September 28,
                                                  1997            1996
                                              --------------   --------------
Increase (decrease) in cash and cash
  equivalents
Cash flows from operating activities:
  Net loss                                    $   (132,957)    $   (232,445)
    Adjustments to reconcile net loss
      to net cash used in operating
      activities:
       Depreciation and amortization                41,108           43,631
       Inventory reserves for lower of
         cost or market                            (10,446)          33,414
       Gain on sale of subsidiary                        -           (2,385)
       Other                                          (128)             785
       Change in operating assets and
       liabilities:
         Accounts receivable                       (91,457)          31,610
         Accounts receivable from affiliates           516           (6,658)
         Net collections of accounts receivable
           sold to financing company               (40,289)           6,000
         Inventories                               (51,182)          19,238
         Prepaid expenses and other                   (606)           2,771
         Accounts payable                           89,060          (29,771)
         Accounts payable to affiliates              6,610            9,874
         Income taxes payable                         (425)          (1,813)
         Accrued payroll and payroll-related
           expenses                                  7,794            4,433
         Accrued warranty                           (4,272)          (5,736)
         Accrued expenses                            4,388           (5,934)
                                                -------------    ------------
   Total adjustments                               (49,329)          99,459
                                                -------------    ------------
     Net cash used in operating activities        (182,286)        (132,986)
                                                -------------    ------------

Cash flows from investing activities:
     Proceeds from sale of subsidiary                    -           25,000
     Purchase of property, plant and equipment     (52,755)         (58,587)
     Other                                           3,954           (6,427)
                                                -------------    ------------
     Net cash used in investing activities         (48,801)         (40,014)
                                                -------------    ------------

Cash flows from financing activities:
     Proceeds from issuance of short-term
        borrowings                                 279,370           27,310
     Principal payments on short-term borrowings   (65,000)         127,362
     Principal payments on debt, including
        capital lease obligations                     (365)            (137)
     Proceeds from issuance of common stock, net
        of notes receivable and stock repurchases        -            1,492
                                                -------------    ------------
     Net cash provided by financing activities     214,005          156,027
                                                -------------    ------------

Net change in cash and cash equivalents            (17,082)         (16,973)

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

Cash and cash equivalents at end of period      $   14,231       $   24,393
                                                -------------    ------------



                             (Continued)
   


                       See accompanying notes.





                           MAXTOR CORPORATION
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (Continued)
                            (In thousands)
                             (Unaudited)

                                                Nine Months Ended
----------------------------------------------------------------------------
                                            September 27,  September 28,
                                               1997           1996
----------------------------------------------------------------------------

Supplemental disclosures of cash flow
   information:
Cash paid for:
     Interest                                 $11,885        $    16,022
     Income taxes                                 514              2,334

Supplemental information on non-cash
   investing and financing activities:
Purchase of property, plant and equipment 
   financed by accounts payable                     -              8,522
Exchange of Common Stock for Series A
   Preferred Stock                                  -                582
----------------------------------------------------------------------------


                  

                        See accompanying notes.



                          MAXTOR CORPORATION
           Notes to Condensed Consolidated Financial Statements

                             (Unaudited)

1.   Condensed Consolidated financial statements

The  accompanying  unaudited  condensed  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 (5.60% as of
September  27,  1997)  plus commission and is  subject  to  a  10%
retention.   As of September 27, 1997, $87.3 million in  sales  of
accounts receivable, for which proceeds had not yet been received,
were  included  in  accounts  receivable  and  $63.2  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
$160   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  $31
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 September  27,
1997,  $31  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 September 27, 1997,  $129  million  of
borrowings under this facility were outstanding.

From  September  30,  1996  to September  27,  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 6.30 to LIBOR plus 0.65  percent.
As  of  September 27, 1997, $50 million of borrowings under  these
credit facilities were outstanding.

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.

On  April  10, 1997, the Company obtained a $150 million  line  of
credit  from HEA which replaced all previous HEA lines.  In August
1997, this line was amended, increasing the line of credit to $270
million, all other term stay the same.  As of September 27,  1997,
$270  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.     Subsequent Event

On  October 22, 1997, International Manufacturing Services,  Inc.
(IMS),  completed an Initial Public Offering (IPO) of  5  million
common shares at a price of $11.50 per share.  Under the terms of
the  note due to the Company, if the proceeds of the IPO  are  in
excess of  $45  million,  IMS  would  be  required to repay both
principle and  interest on the note.   The note and  its related
interest, which aggregated $20.1 million, was paid in full as  of
October 28, 1997.  The Company had previously fully reserved the
amount  of the note and related interest and expects to record a
gain on  the  transaction of  approximately $21.9 million in the
fourth quarter of fiscal year 1997.

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 market 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", "-Trends and Uncertainties",
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 CONDENSED
   FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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


RESULTS OF OPERATIONS

QUARTER ENDED September 27, 1997 COMPARED TO QUARTER ENDED September 28, 1996

                        Three Months Ended           Nine Months Ended
-----------------------------------------------------------------------------
(In millions)    September 27, September 28,    September 27, September 28,
Fiscal quarter 
ended               1997         1996   Change     1997         1996   Change
-----------------------------------------------------------------------------

Revenue           $ 392.2    $ 284.5   $ 107.7   $ 922.3    $ 860.8  $ 61.5

Gross profit      $  21.5    $  (6.4)  $  27.9   $  17.2    $ (66.7) $ 83.9
  As a percentage
    of revenue        5.5%      (2.2%)               1.9%      (7.8%)

Net loss          $ (31.4)   $ (62.4)  $  31.0   $(133.0)   $(232.4) $ 99.4
  As a percentage
    of revenue       (8.0%)    (21.9%)             (14.4%)    (27.0%)
-----------------------------------------------------------------------------


Revenue
Revenue  for the quarter ended September 27, 1997 increased  37.9%
primarily  due to  united volume increases, and a shift in product
mix to  the  Company's  higher  capacity products.   Unit  volumes
increased by 47.1% versus the quarter ended September 28, 1996.
Revenue  and  unit volume  growth were  a result of better time to
market performance, strengthening of the customer base and a trend
to shipping higher capacity drives.  Revenue for the nine  months
ended September 27, 1997 increased 7.1% when compared to  the same
period of the prior year due to an increase in units sold. Pricing
pressures  resulted in slightly lower average selling prices  when
compared to the same period a year ago, and this trend is expected
to continue in the near future.

During  the  three and nine months ended September 27,  1997,  one
customer  accounted for 20.0% and 20.4% of the Company's  revenue,
respectively.  During the quarter ended September  28,  1996,  two
customers accounted for over 10% of the Company's revenue.

Gross profit
Gross  profit as a percentage of revenue improved in  the  quarter
ended  September 27, 1997 compared to the quarter ended  September
28,  1996. As a result of the introduction of new products  during
the  year  of 1997, the Company's gross profit for the  three  and
nine  months ended September 27, 1997 increased  $27.9 million and
$83.9 million,  respectively,  as compared with the same period a
year ago.  This improvement is due to new products which represent 
a return to  competitive  aerial  density.   Additionally, margins
were affected by reserves for lower of cost or market of $33.4
million in the first nine months of 1996.

The  Company  continues  its efforts to reduce  its  average  unit
manufacturing  costs  and 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  margin for the
industry as a whole, including the Company's gross margin.


Operating expenses
                         Three Months Ended          Nine Months Ended
------------------------------------------------------------------------------
(In millions)      September 27,September 28,   September 27, September 28,
Fiscal quarter ended  1997         1996   Change   1997          1996   Change
------------------------------------------------------------------------------
Research and
  development      $  26.7   $  30.0   $ (3.3)  $  78.6    $  84.1   $  (5.5)
    As a percentage
     of revenue        6.8%     10.5%               8.5%       9.8%

Selling, general and
  administrative   $  15.5   $  19.8   $ (4.3)  $  45.9    $  66.3   $ (20.4)
    As a percentage
     of revenue        4.0%      7.0%               5.0%       7.7%
------------------------------------------------------------------------------


Research  and  development (R&D) expenses decreased  for the three 
and nine months ended September 27, 1997 primarily as a result  of
the  Company's  continued  emphasis on expense  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  the  Company  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 nine months ended September 27, 1997.


Interest expense and interest income

                         Three Months Ended         Nine Months Ended
------------------------------------------------------------------------------
(In millions)      September 27, September 28,   September 27, September 28,
Fiscal quarter ended  1997          1996   Change   1997         1996   Change
------------------------------------------------------------------------------

Interest expense     $  10.9    $  6.4   $ 4.5    $  27.4     $  15.1  $ 12.3

Interest income      $    .4    $   .3   $  .1    $   2.6     $    .9  $  1.7

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

Interest expense increased due to a substantial increase in short-
term   borrowings  required  in  order  to  fund   the   Company's
operations.   The  Company had $369.5 million  of  short-term  and
$224.3  million of long-term lines of credit borrowings  and  debt
outstanding at September 27, 1997, compared with $149.8 million of
short-term  and  $229.1  million  of  long-term  lines  of  credit
borrowings  and  debt  outstanding at  September  28,  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 nine months ended September
27,  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       Nine Months Ended
-----------------------------------------------------------------------------
(In millions)      September 27, September 28,  September 27, September 28,
Fiscal  quarter ended 1997          1996   Change  1997         1996  Change
-----------------------------------------------------------------------------

Provision for
  income taxes       $  0.2     $  0.2   $  0.0   $  0.7   $  0.9   $  (0.2)

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

The provision for income taxes consists primarily of foreign
taxes.  The decrease of $.2 million for the nine 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 nine months ended   the nine months ended
(In millions)                    September 27, 1997      September 28, 1996
------------------------------------------------------------------------------

Cash and cash equivalents            $    14.2               $    24.4

Short-term borrowings                $    94.2               $    54.8

Short-term borrowings due to
  affiliate                          $   270.0               $    70.0

Net cash used in operating
  activities                         $   182.3               $   133.0

Net cash used in investing
  activities                         $    48.8               $    40.0

Net cash provided by financing
  activities                         $   214.0               $   156.0

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

As   of  September  27,  1997,  the  Company  had  cash  and  cash
equivalents  of $14.2 million as compared to $31.3 million  as  of
December 28, 1996, a decrease of $17.1 million.

Net  cash  used  in operating activities during  the  nine  months
ending  September 27, 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
nine months ended September 27, 1997 were $52.8 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 $214 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
$160   million  (the  Facilities)  through  Citibank,   N.A.   and
syndicated  among fifteen banks. The Facilities are guaranteed  by
HEI.   A  total  of  $31  million of the  Facility  is  a  364-day
committed  facility,  renewable annually  at  the  option  of  the
syndicate  banks  and expiring August 27, 1998.  The  facility  is
used  primarily for general operating purposes and bears  interest
at  a rate based on LIBOR plus 0.53 percent.  As of September  27,
1997,  $31  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 September 27, 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 6.30 percent  to  LIBOR  plus  0.65
percent.   As  of  September 27, 1997, $50 million  of  borrowings
under this line of credit were outstanding.

On  April  10, 1997, the Company obtained a $150 million  line  of
credit  from HEA which replaced all previous HEA lines.  In August
1997, this line was amended, increasing the line of credit to $270
million.   As of September 27, 1997, $270 million was outstanding.
Interest is paid quarterly at approximately 6.5%.

The  liquidity  of the Company continued to be adversely  affected
during  the  nine months ended September 27, 1997  by  significant
losses  from  operations.   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.  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.  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 market 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 broader product lines which  allow
them to mitigate certain volatility 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  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 and 1997, 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 2.  Not Applicable


Item 3.  Not Applicable


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

The  Company's annual meeting was held August 13, 1997, at  which
its sole stockholder reelected Charles F. Christ and Y. H. Kim as
Class  II  directors  to hold office for a three-year  term,  and
ratified  the  appointment of Coopers &  Lybrand  L.L.P.  as  the
Company's  independent  accounting  firm  for  the  Corporation's
fiscal year ending December 27, 1997.


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: November 10 , 1997  By:            /s/ Paul J. Tufano
                                        -----------------------
                                         Paul J. Tufano
                                         Vice President Finance and
                                         Chief Financial  Officer