Exhibit 10.1.16

                            SECOND AMENDMENT TO LEASE

This SECOND AMENDMENT TO LEASE ("Second  Amendment") is made and entered into as
of March 16, 1999 by and between  Northern  Trust Bank of California  N.A.,  not
individually  but as Special  Trustee  under  agreement  dated March 2, 1998 and
known as Trust Number 22-48166, The Northern Trust Company, as Custodian for the
Motion  Picture  Industry  Individual  Account  Plan,  First  Hawaiian  Bank, as
Custodian for the Hawaii Carpenters  Pension Fund, Basis PRE, Inc., a California
corporation,  Supplemental PRE, Inc., a California corporation,  and Wells Fargo
Bank, N.A.  (successor by merger to First  Interstate  Bank of  California),  as
Corporate  Co-Trustee  for the Western  States Office &  Professional  Employees
Pension Fund  ("Landlord")  and Komag  Material  Technology,  Inc., a California
corporation ("Tenant").

     I. Landlord's  predecessor in interest and Tenant entered into that certain
lease  ("Lease")  dated May 2, 1989,  and that certain  Amendment to Lease dated
November 1, 1993 ("First Amendment") for certain property  ("Premises') situated
at Stony Point West  Business Park  ("Park"),  Santa Rosa,  California,  as more
particularly set forth in the Lease.

     II.  Landlord's  predecessor  in  interest,  owner  of the  Park,  sold the
Premises to Landlord and as a  consequence  references  to the Park in the Lease
are no longer applicable to the Lease obligations of Tenant.

     III.  The  parties  wish to extend  the Term of the  Lease  and make  other
modifications thereto.

     IV. This Second Amendment supersedes the First Amendment.

     Therefore,   in  consideration  of  the  mutual  covenants  and  agreements
contained  in this  Amendment,  and other good and valuable  consideration,  the
receipt and  sufficiency  of which is hereby  acknowledged,  Landlord and Tenant
agree as follows:

     A. The First  Amendment  is hereby  replaced  with  this  Second  Amendment
effective as of May 1, 1999. The Lease as amended by this Second Amendment shall
govern the rights and  obligations  of Landlord  and Tenant for the New Term (as
defined below) and the First Amendment shall not be applicable to the New Term.

     B.  References to the "Park" in the Lease,  unless  intended to include the
"Premises",  are to be disregarded and any Tenant obligations regarding the Park
or Park Operating Expenses are not applicable.

     C. Unless otherwise  stated,  any capitalized term in this Second Amendment
is hereby given the same meaning as set forth in the Lease.
<PAGE>
     D. Tenant  accepts the Premises in their "as is" condition on  commencement
of the New Term.

     E. Section 3.01 of the Lease is modified to provide as follows: The Term of
this Lease shall be for five (5) years  commencing  on May 1, 1999 and ending on
April 30, 2004 ("New Term").

     F. Section  3.02(a) is deleted and replaced by: Provided that Tenant is not
in default  under this Lease at the time of  exercise of the right to extend and
on April 30, 2004,  the  expiration  date of the New Term ("New Term  Expiration
Date"), Tenant shall have the right, at its option, to extend this Lease for one
(1) period of five (5) years ("New Term  Extension  Term")  commencing on May 1,
2004.

     Section 3.02(b) is deleted and replaced by: If Tenant elects to extend this
Lease for the New Term Extension  Term,  Tenant shall give  unequivocal  written
notice ("New Term  Extension  Exercise  Notice") of its exercise to Landlord not
less than one hundred eighty (180) days, nor more than three hundred sixty (360)
days prior to the New Term  Expiration  Date.  Tenant's  failure to give the New
Term  Exercise  Notice in a timely  manner  shall be deemed a waiver of Tenant's
right to extend. The terms,  covenants and conditions applicable to the New Term
Extension  Term shall be the same terms,  covenants and conditions of this Lease
as  amended  by this  Second  Amendment,  except  that (i)  Tenant  shall not be
entitled to any further option to extend after the New Term Extension  Term, and
(ii) the Base Rent for the Premises  shall be increased  (but not  decreased) as
provided in this Amended Section 3.02.

     Section  3.02(c) is amended to change the phrase  "First  Exercise  Notice"
wherever  it  appears  to "New Term  Exercise  Notice,"  and the  phrase  "First
Extension  Term" is changed to "New Term Extension  Term,"  wherever it appears,
and the phrase  "Term" is changed to "New Term,"  wherever  it appears,  so that
Base  Rent  for the New  Term  Extension  Term  will be full  market  rent to be
determined as provided in Section 3.02(c)(i) through (iv).

     Section 3.02(d) is deleted.

     G. The following shall be added at the end of Section 4.01 of the Lease:

     The monthly Base Rent for the New Term shall be as follows:

Months 1-12 (May 1, 1999-April 30, 2000): $44,538 per Month; $534,456 per Year
<PAGE>
Months 13-24 (May 1, 2000-April 30, 2001):$46,231 per Month; $554,772 per Year

Months 25-36 (May 1, 2001-April 30, 2002):$47,998 per Month; $575,856 per Year

Months 37-48 (May 1, 2002-April 30, 2003):$49,811 per Month; $597,732 per Year

Months 49-60 (May 1, 2003-April 30, 2004):$51,704 per Month; $620,448 per Year

     H. Section 4.03 is amended to add the following:

Base Rent for the New Term includes the following Operating  Expenses:  (a) real
estate taxes  described in Section  5.01,  (b) exterior  landscaping  repair and
maintenance,  (c) the  insurance  specified  in  Sections  6.01  and  6.03,  (d)
telephone  lines for fire and life safety  equipment  for the  Premises  and (e)
Management  Cost  Recovery,  which is limited to 3% of the Base Rent.  Any other
Operating  Expenses  (defined below) arising after  commencement of the New Term
are Tenant's responsibility and payable as Additional Rent.

     I. Section 4.04 of the Lease is hereby deleted for the New Term.

     J. Sections  5.01,  5.02,  5.03 of the Lease are hereby deleted for the New
Term except for purposes of reference.

     K. Sections 6.01 and 6.03 of the Lease are hereby  deleted for the New Term
except for purposes of reference.

     L. Sections 7.01 through 7.05 are deleted for the New Term and replaced by:

     Section 7.01.  "Operating  Expenses" are all reasonable  costs and expenses
arising  after  commencement  of the New Term of every  kind  and  nature  which
Landlord shall pay or become  obligated to pay in connection  with ownership and
operation of the Premises,  surrounding property and supporting facilities which
Landlord has not previously  incurred during Tenant's  occupancy of the Premises
as of the commencement of the New Term which are incurred after  commencement of
the New Term by Landlord, excluding:

     (a)  real  estate  taxes  as  specified  in  Section  5.01,   (b)  exterior
landscaping repair and maintenance, (c) the insurance specified in Sections 6.01
and  6.03,  (d)  telephone  lines  for fire and life  safety  equipment  for the
Premises and (e) the  Management  Cost  Recovery,  which is limited to 3% of the
Base Rent.

                                      -3-

LANDLORD  __________
TENANT __________
<PAGE>
     M. Section 8.01 of the Lease is amended as follows:

     (a) Subsection  8.01(c) is modified to substitute  "commencement of the NEW
TERM" for the term "Occupancy Date" in the third sentence.

     (b) The  existing  Subsection  8.01(d) is  deleted  and  replaced  with the
following:

     Tenant shall schedule  annual  inspections of the roof of the Building each
year and provide  Landlord a roof  inspection  report  from a qualified  roofing
inspection  company,  mutually  agreed upon by Landlord and Tenant,  on the form
provided  by  Landlord  and Tenant  shall  oversee  and pay for all needed  roof
repairs and maintenance,  as reasonably determined necessary by such inspection.
Landlord  reserves the right to perform its own  inspection and Tenant shall pay
for all repairs reasonably determined necessary by such inspection. In the event
a roof replacement is necessary,  the replacement will be the  responsibility of
the Landlord,  and no portion of the expense of replacement will be passed on to
the Tenant.

     N.  Section  10.01 of the Lease is hereby  deleted  and  replaced  with the
following:

     10.01 Compliance with Laws and Regulations

     Tenant's Obligations.  Tenant, shall, at its sole cost and expense,  comply
with all of the requirements of all municipal, state and federal authorities now
in force, or which may hereafter be in force,  pertaining to Tenant's use of the
Premises,  and shall faithfully observe in the use of the Premises all municipal
ordinances and state and federal statutes now in force or which may hereafter be
in force,  provided,  however,  that in no event shall Tenant be responsible for
improvements  to the Premises that are  structural or capital in nature,  unless
such  alterations  are  required  by law due to Tenant's  particular  use of the
Premises  (as opposed to office uses  generally).  The  judgment of any court of
competent  jurisdiction,  or the admission of Tenant in any action or proceeding
against  Tenant,  whether  Landlord  be a party  thereto  or not,  that any such
ordinance or statute  pertaining  to the Premises  has been  violated,  shall be
conclusive of that fact as between Landlord and Tenant.

     O.  Section  10.02 of the Lease is hereby  deleted  and  replaced  with the
following:

                                      -4-

LANDLORD  __________
TENANT __________
<PAGE>
     10.02 Hazardous Materials. For purposes hereof, "Hazardous Materials" shall
mean any and all flammable explosives,  radioactive  material,  hazardous waste,
toxic  substance  or  related  material,  including  but not  limited  to  those
chemicals known to cause cancer or reproductive toxicity and those materials and
substances defined as "hazardous substances",  "hazardous materials", "hazardous
wastes" or "toxic  substances" in the  Environmental  Laws. For purposes hereof,
"Environmental  Laws"  shall  mean  the  Comprehensive  Environmental  Response,
Compensation  and  Liability  Act of 1980,  42 U.S.C.  Section  9601 et seq; the
Hazardous  Materials  Transportation  Act, 39 U.S.C.  Section 1801, et seq.; the
Solid Waste Disposal Act, as amended by the Resource  Conservation  and Recovery
Act, 42 U.S.C.  Section  6901 et seq.;  the  Federal  Clean Water Act, 33 U.S.C.
Section 1251 et seq.;  the Clean Air Act, 42 U.S.C.  Section  7401 et seq.;  the
Porter-Cologne  Water Quality Act,  California Water Code Section 13020 et seq.;
and the California Health and Safety Code, Section 25100 et seq.,  including all
amendments   thereto,   replacements   thereof,   and  regulations  adopted  and
publications promulgated pursuant thereto.

     (a) Tenant  agrees  that during the term of this  Lease,  Tenant  shall not
violate any federal,  state or local law,  ordinance or  regulation  relating to
industrial hygiene, soil, water or environment conditions on, under or about the
Premises including, but not limited to the Environmental Laws.

     (b) Tenant further agrees that,  unless Tenant  receives  Landlord's  prior
written  consent,  which may be withheld in  Landlord's  reasonable  discretion,
during  the  Term of this  Lease,  there  shall be no use,  presence,  disposal,
storage,  generation,  release or threatened release of Hazardous  Materials on,
from or under the  Premises by Tenant,  its agents,  employees,  contractors  or
invitees,  except that Tenant may use incidental amounts of office and custodial
supplies  on  the  Premises,   provided   they  are  used  in  compliance   with
Environmental Laws.

                                      -5-

LANDLORD  __________
TENANT __________
<PAGE>
     (c)  Tenant  shall  advise  Landlord  in  writing  of any use,  generation,
storage,  release,  threatened  release or disposal of  Hazardous  Materials  by
Tenant,  its agents,  employees,  or contractors,  of which it is aware.  Tenant
shall  immediately  notify  Landlord in writing of any violation,  inspection or
enforcement  proceeding  under any  environmental  law concerning  Tenant or the
Premises of which Tenant becomes aware.  Tenant shall make available to Landlord
such  information  and  records  as Tenant  may have and  Landlord  may  request
concerning  the matters  described  herein.  Tenant shall permit  Landlord,  its
agents and engineers to inspect at reasonable times the Premises and any and all
governmental  agency  files and  records  relating  to  Tenant  or the  Premises
concerning Hazardous Materials and to conduct investigations and tests ("tests")
concerning Hazardous Materials, provided that: (i) Landlord shall provide Tenant
with written notice at least five (5) days in advance, (ii) all such tests shall
be performed in a manner using  diligent  efforts to minimize  interruptions  to
Tenant and Tenant's use of the Premises to the extent  commercially  reasonable,
and,  (iii)  Landlord  shall give  Tenant at least ten (10) days  prior  written
notification  of the location of any drilling work to be performed,  (iv) Tenant
shall be entitled to have a representative present for all such testing, and (v)
Landlord  shall  indemnify,  defend,  protect and hold Tenant  harmless from any
loss,  damage,  injury,  or liability to Tenant's  property and employees in and
about the  Premises  caused by  Landlord's  agents,  invitees,  contractors,  or
employees,  related  to such  testing.  The tests  provided  for  herein  may be
conducted by Landlord at or after termination or expiration of the Lease. In the
event such  testing  shall  demonstrate  that Tenant has caused  such  Hazardous
Materials to be present, Tenant shall pay Landlord within thirty (30) days after
Landlord sends to Tenant an invoice therefor, the reasonable amount of all costs
and  expenses  incurred  by  Landlord  as a result  thereof,  including  without
limitation,  those set forth in subparagraph  (d), and costs of testing.  In the
event that such testing  shall either not disclose the presence of any Hazardous
Materials on the Premises, or does not demonstrate the Tenant to be the cause of
the Hazardous  Materials on the Premises,  Landlord  shall pay the costs of such
testing solely, without benefit of contribution thereof from Tenant.

     (d) Tenant shall  indemnify,  defend and hold  Landlord  harmless  from and
against any and all claims, judgments,  damages,  penalties, fines, liabilities,
losses, suits,  administrative proceedings and costs (including, but not limited
to,  reasonable  attorneys' and consultants'  fees and all costs and expenses in
connection with any tests, evaluations or remediation or compliance arising from
or related to Hazardous Uses or Release of Hazardous  Materials or violations of
Environmental  Laws on or about the Premises due to the  activities of Tenant or
Tenant's agents, invitees, contractors or employees.

     (e) Notwithstanding  anything to the contrary in this Lease, nothing herein
shall prevent Tenant from using materials other than Hazardous  Materials on the
Premises  that  would  be  used  in  the  ordinary  course  of its  business  as
contemplated  by  this  Lease.  If  during  the  Term  of  this  Lease,   Tenant
contemplates utilizing Hazardous Materials (or assigns this Lease or sublease to
any assignee or subtenant who utilizes Hazardous Material),  Tenant shall obtain
the prior  written  approval from  Landlord to the use thereof,  which  approval
shall not be unreasonably withheld.

                                      -6-

LANDLORD  __________
TENANT __________
<PAGE>
     P. Prior Agreements.  This Second Amendment  contains all of the agreements
of the parties  hereto with  respect to any matter  covered or mentioned in this
Second  Amendment,  and no prior agreements or  understanding  pertaining to any
such matters shall be effective for any purpose. This Second Amendment shall not
be  effective  or binding on any party  until  fully  executed  by both  parties
hereto.

     Q.  Effectiveness of Lease.  Except as expressly amended hereby, all of the
terms,  covenants,  conditions,  provisions  and  agreements  of the Lease shall
remain in full force and effect.

     IN WITNESS WHEREOF,  the parties hereto have executed this Second Amendment
a of the date first above written.


LANDLORD                                  TENANT

NORTHERN TRUST BANK OF CALIFORNIA N.A.,   KOMAG MATERIAL
not individually but as Special Trustee   TECHNOLOGY, INC.
under agreement dated March 2, 1998       a California corporation
and known as Trust Number 22-48166

THE NORTHERN TRUST COMPANY                By:
as Custodian for the Motion Picture           ----------------------------------
Industry Individual Account Plan          Its:
                                               ---------------------------------
FIRST HAWAIIAN BANK,
as Custodian for the Hawaii
Carpenters Pension Fund

BASIC PRE, Inc.,
a California corporation

SUPPLEMENTAL PRE, Inc.,
a California corporation

WELLS FARGO BANK, N.A.
(Successor by merger to
First Interstate Bank of California),
as Corporate Co-Trustee for the
Western States Office & Professional
Employees Pension Fund

By:  McMorgan & Company
Its: Investment Manager

By:
     ------------------------------
     Patrick Murray
     Vice President

Date:
     ------------------------------

                                      -8-

LANDLORD  __________
TENANT __________