10-K405

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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K
                                ---------------

(MARK ONE)

/X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
    SECURITIES EXCHANGE ACT OF 1934

                    FOR THE FISCAL YEAR ENDED JUNE 30, 1995

                                       OR

/ /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
    THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE TRANSITION PERIOD FROM        TO

                          COMMISSION FILE NO. 0-10630
                            SEAGATE TECHNOLOGY, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                            ------------------------

                                               
                    DELAWARE                             94-2612933
        (STATE OR OTHER JURISDICTION OF               (I.R.S. EMPLOYER
         INCORPORATION OR ORGANIZATION)            IDENTIFICATION NUMBER)
                 920 DISC DRIVE
           SCOTTS VALLEY, CALIFORNIA                        95066
    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)             (ZIP CODE)
    REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (408) 438-6550



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



       SECURITIES REGISTERED PURSUANT TO SECTION 12 (B) OF THE ACT:
                                                    NAME OF EACH EXCHANGE
              TITLE OF EACH CLASS                    ON WHICH REGISTERED
------------------------------------------------  -------------------------
     COMMON STOCK, PAR VALUE $.01 PER SHARE        NEW YORK STOCK EXCHANGE
                                               
 6 3/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE    NEW YORK STOCK EXCHANGE
                      2012


          SECURITIES REGISTERED PURSUANT TO SECTION 12 (G) OF THE ACT:
                                      NONE

    Indicate  by check  mark whether  the Registrant  (1) has  filed all reports
required to be filed by  Section 13 or 15(d) of  the Securities Exchange Act  of
1934  during  the preceding  12  months (or  for  such shorter  period  that the
Registrant was required to file such reports), and (2) has been subject to  such
filing requirements for the past 90 days:    YES /X/  NO / /

    Indicate  by check mark if disclosure  of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge, in definitive  proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.    /X/

    The aggregate market value of the voting stock held by non-affiliates of the
registrant,  based upon the  closing price of  Common Stock on  June 30, 1995 as
reported by  the New  York  Stock Exchange,  was approximately  $2.063  billion.
Shares  of Common Stock held by each officer and director and by each person who
owns 5% or more of the outstanding Common Stock have been excluded in that  such
persons  may be deemed to be  affiliates. This determination of affiliate status
is not necessarily a conclusive determination for other purposes.

    The number of outstanding  shares of the registrant's  Common Stock on  June
30, 1995 was 71,990,271

                      DOCUMENTS INCORPORATED BY REFERENCE

    Parts  of the following documents are  incorporated by reference to Parts I,
II, III, IV of this form 10-K Report: (1) Proxy Statement for registrant's  1995
Annual  Meeting  of Shareholders  (the "Proxy  Statement") and  (2) registrant's
Annual Report  to Shareholders  for the  fiscal year  ended June  30, 1995  (the
"Annual Report to Shareholders").

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                                     PART I

ITEM 1.  BUSINESS

GENERAL

    Seagate  Technology,  Inc. (herein  "Seagate  Technology", "Seagate"  or the
"Company") designs, manufactures and markets a broad line of rigid magnetic disc
drives for use in computer systems  ranging from notebook computers and  desktop
personal  computers to workstations and supercomputers  as well as in multimedia
applications such as digital video  and video-on-demand. The Company's  products
include  approximately 100 rigid disc drive models with form factors from 2.5 to
5.25 inches and capacities from 170 megabytes to 9 gigabytes. The Company  sells
its products to original equipment manufacturers ("OEMs") for inclusion in their
computer  systems or subsystems, and to distributors, resellers and dealers. The
Company has pursued a strategy  of vertical integration and accordingly  designs
and  manufactures rigid disc drive  components including recording heads, discs,
substrates, motors and custom integrated circuits. It also assembles certain  of
the  key subassemblies for  use in its products  including printed circuit board
and head stack  assemblies. The  Company's products  are currently  manufactured
primarily in the Far East with limited production in the United States.

    In  addition to pursuing its core rigid  disc drive business, the Company is
broadening its business  strategy as  a data  technology company  to more  fully
address  the  markets for  storage, retrieval  and management  of data.  In this
regard, the Company has implemented a strategy to establish itself as a  leading
supplier  of selected magnetic recording  components, including thin-film heads,
to other manufacturers.  In line  with this  strategy the  Company, in  December
1994,   acquired  Applied  Magnetics  Corporation's   tape  head  subsidiary,  a
manufacturer of  magnetic recording  tape heads  for digital  data storage.  The
Company  has also  invested in,  and continues  to investigate  opportunities to
invest in  software activities  (see Software  Expansion, below).  Finally,  the
Company's  broadened strategy may  include expanding its  traditional rigid disc
drive business to  include other forms  of data storage  and retrieval, such  as
flash  memory, where  the Company has  made a significant  investment in SunDisk
Corporation ("SunDisk"), a  flash memory company.  The Company anticipates  that
this  broadened strategy may include  additional acquisitions of, investments in
and  strategic  alliances  regarding  complementary  businesses,  products   and
technologies.  Neither the  components business,  the software  business nor the
investment in SunDisk was  material to the Company's  results of operations  for
fiscal 1995.

SOFTWARE EXPANSION

    The  Company is seeking to leverage  its name recognition, existing presence
in  international  markets,  distribution  channels  and  OEM  relationships  by
offering software products directed towards the client/server environment.

    The  Company anticipates  that users  of computer  systems will increasingly
rely upon client/server network computing environments and believes that as this
reliance increases,  users  will  demand  software  that  more  efficiently  and
securely   manages  and  provides  access  to  data  across  computer  networked
environments. As  such,  the Company  is  broadening its  core  competencies  to
include software products to meet these requirements.

    In  May 1994 Seagate acquired Crystal  Computer Services, Inc., a Vancouver,
Canada based developer and  marketer of data access  and reporting software  for
the  Windows  platform.  These products  are  sold as  Crystal  Reports, Crystal
Reports Pro and Crystal Reports Server.

    In July 1994 the Company established  an equity position in Dragon  Systems,
Inc.,  a Massachusetts based developer of advanced speech recognition technology
and products  for  PC/workstation  platforms.  The  Dragon  family  of  products
consists  of  dictation command  and  control programs,  and  developer's tools,
including Dragon Dictate, Dragon Talk->To, and Dragon VoiceTools.

                                       1

    In August  1994 the  Company acquired  Palindrome Corporation,  an  Illinois
based  developer and marketer of storage  management software for Novell NetWare
based networks  and enterprise  LANs. Palindrome  provides data  protection  and
management  software  including  disaster recovery  planning,  backup archiving,
migration, hierarchical storage management (HSM), library and robotics  control,
and centralized management.

    In  February  1995 Seagate  acquired Network  Computing, Inc.,  a California
based developer and marketer of solutions for proactively managing NetWare  file
servers,  workstations  and  SNMP  devices. Its  LANAlert  product  provides for
automated monitoring and alerting of file servers and workstations.

    In March  1995  the  Company  acquired  NetLabs  Inc.,  a  California  based
developer  and marketer of network  management software solutions for UNIX-based
networks. NetLabs markets an integrated  suite of application software  products
that  enable users to automate and simplify the monitoring of network status and
performance, detect problems, issue alerts and initiate corrective action, track
inventory, and manage changes in network operation.

    In May 1995 the Company acquired Frye Computer Systems Inc., a Massachusetts
based developer and  marketer of  network management software  solutions for  PC
LANs.  Fryes  line of  products, THE  FRYE UTILITIES  FOR NETWORKS,  includes an
integrated set of  product modules providing  solutions for complicated  network
management problems.

    In  June 1995 the  Company acquired Creative  Interaction Technologies, Inc.
(CIT), a North  Carolina based  network management software  company. CIT  makes
AshWin, a batch scheduler for heterogeneous client/server computing.

    Seagate   intends  to  continue  its   expansion  into  software  and  other
complementary businesses  and is  actively pursuing  discussions with  companies
that  fit with its strategy. Key to  the Company's software expansion success is
acquiring  companies  that   possess  technology,   development  personnel   and
management providing long-term growth potential. However, implementation of this
broadened  strategy entails risks  of entering markets in  which the Company may
have limited or no experience. In addition, such broadened strategy could result
in the  diversion of  management's  attention from  the  core rigid  disc  drive
business  which could adversely impact the core business. The broadened strategy
has entailed and  may continue  to entail  acquisitions of,  or investments  in,
businesses,  products  and  technologies. Acquisitions  involve  numerous risks,
including difficulties in the assimilation of the operations and products of the
acquired businesses and the potential loss of key employees or customers of  the
acquired businesses.

RIGID DISC DRIVE TECHNOLOGY

    Magnetic  disc  drives are  used in  computer systems  to record,  store and
retrieve digital information.  Most computer  applications require  access to  a
greater  volume of  data than  can economically be  stored in  the random access
memory  of  the   computer's  central   processing  unit   (commonly  known   as
"semiconductor"  memory). This information can be stored on a variety of storage
devices, including  rigid  disc  drives, flexible  disc  drives,  magnetic  tape
drives,  optical disc drives and semiconductor memory. Rigid disc drives provide
access to large volumes of information faster than optical disc drives, flexible
disc drives  or  magnetic tape  drives  and  at substantially  lower  cost  than
high-speed semiconductor memory.

    Although  products vary,  all rigid disc  drives incorporate  the same basic
technology. Inside a sealed housing, one or  more rigid discs are attached to  a
spindle  assembly that rotates the discs at  a high constant speed around a hub.
The discs, or media, are the components  on which data is stored and from  which
it  is retrieved. Each disc typically consists of a substrate of finely machined
aluminum or glass with a magnetic layer of a "thin-film" metallic material.

                                       2

    Read/write heads, mounted on an arm assembly similar in concept to that of a
record player, fly extremely close to each disc surface, and record data on  and
retrieve it from concentric tracks in the magnetic layers of the rotating discs.

    Areal  density  is a  measure of  storage  capacity per  square inch  on the
recording surface of a disc. It represents the number of bits of information  on
a linear inch of the recording track (called bits per inch or bpi) multiplied by
the  number  of  recording  tracks  on  a radial  inch  of  the  disc.  With the
proliferation  of  multimedia  applications,  the  demand  for  increased  areal
densities  has and continues to increase at an accelerating rate since sound and
moving pictures require  many times  the storage  capacity of  simple text.  The
Company  is  aggressively pursuing  a range  of  technologies to  increase areal
densities across the entire range of its products including the use of  advanced
signal  processing techniques such as PRML (Partial Response Maximum Likelihood)
read/write channels, advanced  servo systems, higher  precision mechanics and  a
more advanced head technology. Today, all Seagate drives use inductive thin-film
heads,  which  are based  on  semiconductor processing  technology.  However, to
attain greater  areal densities,  the Company  currently has  under  development
magneto-resistive  ("MR") thin-film heads  to be incorporated  into its recently
announced 8 GB Barracuda drive, the ST18771, as well as into future products. MR
heads have discrete read  and write structures which  take advantage of  special
magnetic  properties in certain  metals to achieve  significantly higher storage
capacities. There can  be no  assurance that the  Company's development  efforts
will be successful. See "Product Development."

    Upon  instructions from the drive's electronic circuitry, a head positioning
mechanism (an "actuator") guides the heads to the selected track of a disc where
the data will  be recorded or  retrieved. The disc  drive communicates with  the
host  computer through an internal controller.  Disc drive manufacturers may use
one or more of  several industry standard interfaces,  such as IPI  (Intelligent
Peripheral   Interface),  SCSI  (Small  Computer   System  Interface),  ATA  (AT
Attachment), PCMCIA (Personal Computer Memory Card International Association) or
proprietary interfaces, such as EISA (Extended Industry Standard Architecture).

    Rigid  disc   drive   performance  is   commonly   measured  by   four   key
characteristics:  average seek time (commonly  expressed in milliseconds), which
is the time  needed to  position the  heads over a  selected track  on the  disc
surface;  internal  data  transfer  rate  (commonly  expressed  in  Megabits per
second), which is the rate  at which data is transferred  to and from the  disc;
storage  capacity (commonly expressed in Megabytes), which is the amount of data
that can be stored on the disc; and spindle rotational speed (commonly expressed
in revolutions per minute), which has an effect on average latency or access  to
data.

MARKET OVERVIEW

    Rigid  disc drives are used in a broad  range of computer systems as well as
multimedia applications such as digital  video and video-on-demand. The  Company
defines  the major computer system markets to include mobile computers, personal
computers, mid-range  systems  and  high-end  applications.  Users  of  computer
systems  are increasingly demanding additional data storage capacity with higher
performance in  order  to  (i) use  more  sophisticated  applications  software,
including  database  management,  CAD/CAM/CAE, desktop  publishing  and enhanced
graphics  applications,  and  (ii)  operate  in  multi-user,  multitasking   and
multimedia environments.

    PERSONAL AND MOBILE COMPUTERS

    Desktop   and  portable  personal   computers  are  used   in  a  number  of
environments, ranging from homes to businesses and multi-user networks. Software
applications are  primarily word  processing, spreadsheet,  desktop  publishing,
database  management,  multimedia and  other  related applications.  The Company
believes the  minimum storage  requirements  in the  past year  for  entry-level
personal  computers were generally  270 megabytes ("MB") to  540 MB of formatted
capacity with average  seek times of  15 milliseconds ("msec")  or less. As  the
personal computer market has matured, users of

                                       3

personal  computers  have  become increasingly  price  sensitive.  The Company's
objective for the  desktop and portable  personal computer market  is to  design
drives for high-volume, low-cost manufacture.

    Smaller  footprint microcomputers,  such as  portable, laptop,  notebook and
sub-notebook computers require rigid disc drives  in form factors of 2.5  inches
or  less  that emphasize  durability and  low power  consumption in  addition to
capacity and other performance characteristics found in their desktop functional
equivalents. Personal digital assistants, hand-held and pen-based computers  may
use  1.8 or 2.5 inch  hard disc drives or  flash memory in the  form of a PCMCIA
card  for  additional  memory.  These  applications  also  emphasize  low  power
consumption as well as very high degrees of durability.

    MID-RANGE SYSTEMS

    Mid-range   systems  include  high   performance  microcomputers,  technical
workstations,  servers   and   departmental  minicomputers.   Applications   are
characterized  by compute-  and data-intensive  solutions, such  as CAD/CAM/CAE,
network management, larger database management systems, scientific  applications
and  small to medium-sized  business applications such  as materials requirement
planning, payroll,  general  ledger  systems  and  related  management  reports.
Mid-range  systems typically require rigid disc  drive storage capacities from 1
gigabyte ("GB") to 4 GB per drive and  average seek times of less than 12  msec.
Mid-range  systems  typically use  3.5 and  5.25  inch disc  drives. Due  to the
leading  edge  characteristics  required  by  end-users  of  mid-range  systems,
manufacturers  of such systems emphasize performance as well as price as the key
selling points.

    HIGH-END APPLICATIONS

    Large systems include  mainframes and  supercomputers. Typical  applications
are  medium  and  large  business  management  systems,  transaction processing,
parallel processing applications and other applications requiring intensive data
manipulation. Also inclusive in high-end  applications are systems designed  for
video-on-demand and near-line storage.

    Users  of these  systems generally require  capacities of  1 GB to  9 GB per
drive with average seek times of less  than 12 msec. End-users of large  systems
are  less concerned than users  of smaller systems with  the size, weight, power
consumption and absolute  cost of  the drive.  As with  mid-range systems,  disc
drive  products  are  typically designed  into  these  systems by  the  OEM with
emphasis on performance, reliability and  capacity. In this arena, data  storage
subsystems  are used  containing large  numbers of  spindles. Data  integrity is
paramount, so  high device  reliability and  maintainability are  key  features.
Mainframe,  supercomputer and digital video systems  also benefit from very high
device data rates (up to ten times that in small computer systems).

PRODUCTS

    The Company's products  include approximately  100 rigid  disc drive  models
with form factors from 2.5 to 5.25 inches and capacities from 170 megabytes to 9
gigabytes.  The Company provides  more than one product  at some capacity points
and differentiates products on  a price/performance and  form factor basis.  The
Company  believes  that its  broad range  of rigid  disc drives  is particularly
appealing to customers,  such as  large OEMs, which  require a  wide variety  of
drive  capacities,  performance  levels and  interfaces.  Producing  for several
market segments  also  broadens the  Company's  customer base  and  reduces  the
Company's  reliance  on any  one  segment of  the  computer market.  The Company
continues to devote its resources  to developing products with industry  leading
performance  characteristics  and to  being among  the  first to  introduce such
products to  market.  The  Company  continuously seeks  to  enhance  its  market
presence  in emerging segments of the rigid  disc drive market by drawing on its
established  capabilities  in  high-volume,  low-cost  production.  The  Company
believes it offers the broadest range of disc storage products available.

    MOBILE COMPUTING

    Announcement  of the Company's first  2.5 inch family of  drives was made in
November 1990 with the  ST9096 family. The Company  has continued to expand  its
2.5 inch family with two different form

                                       4

factors,  the 19mm  high form  factor which is  designed to  address the highest
capacity segment of the mobile computing market, and the 12.5mm high form factor
which is  designed to  address the  sub-notebook market.  In November  1992  the
Company  introduced  a patented  shock  sensing technology  called SafeRite-TM-.
SafeRite technology allows for  a much higher  specification of operating  shock
and helps to prevent the drive from writing data "off track". This technology is
available in all of the Company's 2.5 inch drives.

    In  October 1993 the Company announced  its ST9550 family, later renaming it
the "Marathon" family. This 19mm height family was introduced in 455 MB and  341
MB versions. Recent additions to this family include the ST9655, the ST9420, and
the ST9816, with formatted capacities of 520 MB, 420 MB and 816 MB respectively.
The  ST9655 and  the ST9420  went into  volume production  during the  first and
fourth quarters of fiscal  1995, respectively. The ST9816  is expected to  begin
volume  production in  the first  quarter of  fiscal 1996.  In January  1994 the
12.5mm high ST9300 family (Marathon "SL") was announced with 262, 210 and 131 MB
versions. Volume production  of the  Marathon SL  products began  in the  fourth
quarter  of fiscal 1994. Future plans for  the 2.5 inch family of drives include
continued higher capacities and lower cost designs.

    DESKTOP COMPUTING

    In January 1995 the Company began volume shipments of the newest Medalist xe
product, the Medalist 545xe (ST3660). This 545 MB drive ended the fiscal year as
one of the Company's highest unit volume products. The Medalist xe family of 3.5
inch low-profile  cost-effective disc  drives features  capacity points  ranging
from  214 MB to 545 MB of formatted  capacity. The design was leveraged from the
earlier ST3290 and ST3144 products that had been shipping in volume in 1993. The
Medalist xe family, formerly  the ST3491 family, began  volume shipments in  the
third quarter of fiscal 1994.

    Also  in  January  1995  the  Company announced  two  new  additions  to the
Decathlon family: the ST5850 and the ST51080. These drives have 850 MB and  1.08
GB of formatted capacity, respectively. Volume production of the ST5850 began in
the  third  quarter of  fiscal 1995.  The  ST51080 is  expected to  begin volume
production in the  first quarter of  fiscal 1996. The  Decathlon family of  disc
drives was first introduced in October 1993. The Decathlon family features a 3.5
inch,  19mm high profile which targets  the emerging ultra-low profile PCs. This
family also enables a mini-array package whereby up to six drives can be mounted
in the space of one 5.25 inch full height drive. In addition to its unique  form
factor,  the  Company  believes  the Decathlon  family  offers  the  most energy
efficient design in its class, providing advanced power savings for "Green  PCs"
and  Energy Star systems. Volume production of the first product in this family,
the ST5660 with 545 MB of formatted capacity, commenced in the first quarter  of
fiscal 1995.

    In  May 1995 the Company announced  another expansion of the Medalist family
to include  a  higher performance  series  of products  with  1.6 GB  and  2  GB
formatted  capacities. As of June 1995, the  Medalist 2140 (2 GB) is the highest
capacity ATA  disc drive  announced  in the  industry.  These new  products  are
directed  to  the growing  capacity and  cost-effective  requirements of  the PC
market. They are scheduled for volume production in the second quarter of fiscal
1996. The Medalist family now features drives with capacity points ranging  from
700 MB to 2 GB.

    MID-RANGE SYSTEMS

    In  October 1992  the Company  expanded its  low-profile 3.5  inch mid-range
product line with the ST31200, a high  performance drive with 1 GB of  formatted
capacity  that  began production  during the  first quarter  of fiscal  1994. In
October 1993  the Company  expanded that  product  family to  a 2  GB  formatted
capacity  platform with the family name of Hawk. The Hawk 2 went into production
the fourth  quarter  of fiscal  1994.  In January  1994  the Hawk  4,  3.5  inch
half-height  4  GB formatted  capacity drive,  was announced.  Volume production
began in  the  first  quarter of  fiscal  1995.  In February  1995  the  Company
announced  the Hawk 2XL  in 1 GB and  2 GB versions. The  Hawk 2XL features PRML
read channels and embedded servos and is designed to provide a balance of  price
and

                                       5

performance.  Volume production  of the  Hawk 2XL is  scheduled to  begin in the
first quarter  of fiscal  1996.  The Company  plans  to continue  designing  and
manufacturing  for  the higher  capacity,  high performance  and  cost sensitive
requirements of this market.

    HIGH-END COMPUTING

    High-end applications range  from digital  video, video-on-demand,  high-end
file  servers, mainframes and  minicomputers to supercomputers.  Two new product
families have  been introduced  by the  Company to  address this  wide range  of
applications.  The  Barracuda family  of 3.5  inch  drives, first  introduced in
October 1992, had the  highest rotational speed of  any drives produced at  that
time.  Since then three additional  products have been added  to the family. The
Barracuda 4 and Barracuda 2-2HP were introduced in October 1993. The Barracuda 4
is a 4 GB  formatted capacity, 7200  RPM drive in  the half-height form  factor.
Volume  production commenced in the first  quarter of fiscal 1995. The Barracuda
2-2HP is a  2 GB formatted  capacity high-performance drive  in the  half-height
form factor featuring the 2 head parallel design which doubles the data transfer
rate.  Volume production of  this product began  in the first  quarter of fiscal
1995. In  January  1994  the Company  announced  the  Barracuda 2,  a  3.5  inch
low-profile,   one-inch  high,  2  GB  formatted  capacity  disc  drive.  Volume
production of this product also began in the fourth quarter of fiscal 1994.

    In May 1995  the Company  announced the  Barracuda 4  LP, a  4 GB  formatted
capacity, high-performance drive in the low-profile form factor. The Barracuda 4
LP is scheduled for volume production in the second quarter of fiscal 1996. Also
announced  in May  1995 was  the Barracuda  8. This  8.7 GB  drive is  the third
generation of  ultrahigh performance  disc  drives in  the  7200 RPM,  3.5  inch
Barracuda  family. The Barracuda 4 LP and  the Barracuda 8 incorporate three new
technologies into the  Barracuda family. The  new technologies are  MR heads,  a
PRML  data  channel and  a high-performance  embedded servo.  These technologies
allow for greater areal densities and result in increased capacity per disc. The
Barracuda 8 is scheduled for volume  production in the second quarter of  fiscal
1996.

    Addressing  the  high-end  5.25 inch  market  the Company  has  continued to
leverage its Elite product line. The Elite 3, with 2.9 GB of formatted  capacity
began volume shipments in August 1992. To address the emerging digital video and
near-line  storage applications  the Company introduced  the Elite  9 in October
1993. The Elite 9  leverages the established  design of the  Elite family to  an
expanded  9  GB of  formatted capacity.  Volume production  began in  the fourth
quarter of fiscal 1994.

    OTHER PRODUCTS

    In January 1993  the Company established  an equity position  in SunDisk,  a
California-based designer, marketer and manufacturer of solid-state flash memory
devices.  These devices are designed for both integrated (embedded) applications
and removable applications. The flash  devices range from 1.8  MB to 175 MB  and
are best suited for highly rugged, power-sensitive environments.

    The  Company offers warranty and out-of-warranty  repair service to users of
its  disc  drives.  The  Company  also  designs  and  manufactures  disc   drive
components,  primarily thin-film heads, principally for  use in its own products
but also for sale to other disc drive manufacturers.

MARKETING AND CUSTOMERS

    The Company  sells its  products  to OEMs  and distributors.  OEM  customers
incorporate  Seagate disc drives  into computer systems  for resale. OEMs either
manufacture and  assemble  computer  system components  into  computer  systems;
purchase  components  to  build  their systems;  or  purchase  complete computer
systems and integrate  the hard  disc drives  and other  hardware and  software.
Distributors  typically resell  Seagate disc drives  to small  OEMs, dealers and
other resellers.  Certain resellers  to  which the  Company directly  sells  its
products  also  resell Seagate  drives as  part of  enhanced packages  (e.g., an
add-on kit for a computer or as part of their own computers). Shipments to  OEMs
were  72%, 68% and 70% of net sales in fiscal 1995, 1994 and 1993, respectively.
No customer accounted

                                       6

for 10% or more of consolidated net  sales in 1995 and 1994. During fiscal  1993
sales to Sun Microsystems, Inc. accounted for approximately 11% of the Company's
consolidated  net  sales.  No  other  customer  accounted  for  10%  or  more of
consolidated net sales in 1993.

    OEMS --  OEM customers  typically enter  into purchase  agreements with  the
Company.  These  agreements provide  for pricing,  volume discounts,  order lead
times, product support obligations and  other terms and conditions, usually  for
periods  of  12 to  24 months,  although  product support  obligations generally
extend substantially beyond  this period. These  master agreements typically  do
not  commit the customer to buy any minimum quantity of products. Deliveries are
scheduled only after receipt of purchase orders. In addition, with limited  lead
time,  customers may  cancel or defer  most purchase  orders without significant
penalty. Anticipated orders from  many of Seagate's customers  have in the  past
failed  to materialize or OEM delivery schedules  have been deferred as a result
of changes in their business needs.  Such order fluctuations and deferrals  have
had a material adverse effect on the Company's operations in the past, and there
can  be no assurance  that the Company  will not experience  such effects in the
future.

    DISTRIBUTORS -- The  Company's distributors, located  throughout the  world,
generally  enter  into non-exclusive  agreements for  the redistribution  of the
Company's  products.  Distributors   typically  furnish  the   Company  with   a
non-binding  indication of their near-term  requirements. Product deliveries are
generally scheduled based  on a weekly  confirmation by the  distributor of  its
requirements  for that week.  The agreements typically  provide the distributors
with price protection with respect to  their inventory of Seagate drives at  the
time  of a reduction  by Seagate in its  selling price for  the drives, and also
provide limited rights to return the product.

    SERVICE AND WARRANTY  -- Seagate  warrants its products  against defects  in
design,  materials and  workmanship by the  Company generally for  three to five
years depending upon the  capacity category of the  disc drive, with the  higher
capacity  products being warranted for the  longer periods. Warranty periods for
disc drives have  been increasing and  may continue to  increase. The  Company's
products are refurbished or repaired at facilities located in the United States,
Singapore and Thailand.

    SALES  OFFICES -- The Company maintains  sales offices throughout the United
States and  in Australia,  England, France,  Hong Kong,  Ireland, Italy,  Japan,
Singapore,  South Korea, Taiwan, Thailand, Germany and Sweden. Foreign sales are
subject to certain controls and restrictions, including, in the case of  certain
countries,  approval by the office of Export Administration of the United States
Department of Commerce.

BACKLOG

    In view of customers'  rights to cancel  or defer orders  with little or  no
penalty,  the  Company  believes  backlog  in the  disc  drive  industry  can be
misleading.

    The Company's  backlog  includes only  those  orders for  which  a  delivery
schedule  has been specified by the  customer. Substantially all orders shown as
backlog at June 30, 1995 were scheduled for delivery within six months.  Because
many  customers place large orders for delivery throughout the year, and because
of the possibility  of customer cancellation  of orders or  changes in  delivery
schedules,  the Company's backlog as of any particular date is not indicative of
the Company's potential sales  for any succeeding  fiscal period. The  Company's
order  backlog at June  30, 1995 was  approximately $1,103,000,000 compared with
approximately $739,000,000 at July 1, 1994.

MANUFACTURING

    The Company's  business objectives  require  it to  establish  manufacturing
capacity  in anticipation  of market demand.  The key elements  of the Company's
manufacturing strategy are:  high-volume, low-cost assembly  and test;  vertical
integration  of selected  components; and  key vendor  relationships. The highly
competitive  disc  drive   industry  requires  that   the  Company   manufacture
significant  volumes of high-quality  drives at low  unit cost. To  do this, the
Company must achieve high manufacturing  yields and obtain uninterrupted  access
to high-quality components in required volumes at competitive prices.

                                       7

    The  Company is currently in  the early stages of  automating certain of its
manufacturing processes. In the coming year it expects several such processes to
become substantially automated. The Company  believes its competitors' level  of
automation is significantly greater than its own.

    Manufacturing  of  the Company's  rigid disc  drives  is a  complex process,
requiring a  "clean  room" environment,  the  assembly of  precision  components
within  narrow tolerances and extensive testing to ensure reliability. The first
step in the manufacturing of a rigid disc drive is the assembly of the  actuator
mechanism,  heads, discs, and spindle  motor in a housing  to form the head-disc
assembly (the "HDA"). The assembly of  the HDA involves a combination of  manual
and  semiautomated processes. After  the HDA is assembled  and servo writing has
been completed, automated testing  equipment subjects the  HDA to several  tests
aimed  at ensuring that it meets all of the Company's specifications for quality
and performance. Upon  completion of  assembly and testing,  circuit boards  are
added  to the HDA and the completed unit  is again tested prior to packaging and
shipment.  The  Company  uses  statistical  process  control  in  an  effort  to
continually  improve  its  manufacturing  processes.  Final  assembly  and  test
operations of  the Company's  disc  drives take  place primarily  at  facilities
located  in Singapore,  Thailand, Minnesota and  Oklahoma. The  Company has also
announced plans  to  establish  a  disc drive  manufacturing  operation  in  the
Republic of Ireland that will begin production in mid-October, 1995. Subassembly
and component operations are performed at the Company's facilities in Singapore,
Thailand,  Minnesota,  California,  Malaysia,  Scotland,  Northern  Ireland  and
Indonesia. In addition, independent entities manufacture or assemble  components
for  the Company  in the  United States, Europe  and various  Far East countries
including Hong Kong, Japan, Korea, China, the Philippines, Singapore, Taiwan and
Thailand.

    The cost, quality  and availability  of certain  components including  head,
media,  spindle  motors,  actuator  motors, printed  circuit  boards  and custom
semiconductors are critical  to the  successful production of  disc drives.  The
Company's  design  and  vertical  integration  have  allowed  it  to  internally
manufacture substantial percentages  of its critical  components. The  Company's
objectives  of  vertical  integration  are to  maintain  control  over component
technology, quality and availability, and to reduce costs. The Company  believes
that  its strategy of vertical integration gives it an advantage over other disc
drive manufacturers. However, this strategy entails a high level of fixed  costs
and  requires a high  volume of production  to be successful.  During periods of
decreased production, these high  fixed costs in  the past have  had and in  the
future  could  have  a  material  adverse effect  on  the  Company's  results of
operations.

    Thin-film sliders are fabricated and  assembled into head gimbal  assemblies
at the Company's facilities. Spindle motors are sourced principally from outside
vendors  in the Far East, although the  Company is increasing its internal motor
manufacturing capabilities.  Actuator  motors  are  sourced  both  from  outside
vendors  and  internally. The  vast  majority of  the  high-volume surface-mount
printed circuit assemblies are assembled  internally. The Company evaluates  the
need  for  second  sources on  a  case-by-case  basis and,  where  it  is deemed
desirable and feasible to  do so, secures multiple  sources for components.  The
Company  has  experienced production  delays  when unable  to  obtain sufficient
quantities of certain  components or  assembly capacity.  The Company  maintains
component  inventory  levels  adequate  for its  short-term  needs.  However, an
inability to obtain essential components,  if prolonged, would adversely  affect
the Company's business.

    Because of the significant fixed costs associated with the production of its
products  and components  and the  industry's history  of declining  prices, the
Company must continue to produce and sell its disc drives in significant volume,
continue to lower  manufacturing costs and  carefully monitor inventory  levels.
Toward  these  ends,  the  Company  continually  evaluates  its  components  and
manufacturing processes  as  well as  the  desirability of  transferring  volume
production  of disc drives and  related components between facilities, including
transfer overseas to countries where  labor costs and other manufacturing  costs
are  significantly  lower than  in  the U.S.,  principally  Singapore, Thailand,
Malaysia and  China.  In addition,  the  Company is  considering  expanding  its
manufacturing  operations into other third world countries. Frequently, transfer
of production of  a product to  a different facility  requires qualification  of
such  new  facility by  certain of  the  Company's OEM  customers. There  can be

                                       8

no  certainty  that  such  changes  and  transfers  will  be  implemented  on  a
cost-effective  basis without delays  or disruption in  the Company's production
and without adversely affecting the Company's results of operations.

    Although  offshore  operations  are  subject  to  certain  inherent   risks,
including  delays in transportation, changes  in governmental policies, tariffs,
import/export regulations,  and  fluctuations  in  currency  exchange  rates  in
addition  to geographic  limitations on  management controls  and reporting, the
Company has not had  any significant adverse experience  in this regard and  has
significant  experience in the  offshore production of  its products. Certain of
the Far East countries in which the Company operates have experienced  political
unrest  and  the Company's  operations have  been  adversely affected  for short
periods of time.

PRODUCT DEVELOPMENT

    The  Company's  strategy   for  new  products   emphasizes  developing   and
introducing  on a timely basis products that offer functionality and performance
equal to or  better than  competitive product  offerings. The  rigid disc  drive
industry  is characterized  by ongoing,  rapid technological  change, relatively
short product life cycles and rapidly changing user needs. The Company  believes
that its future success will depend upon its ability to develop, manufacture and
market   products  which  meet  changing  user  needs,  and  which  successfully
anticipate or respond to changes in technology and standards on a cost-effective
and timely basis. Accordingly,  the Company is committed  to the development  of
new  component  technologies, new  products,  and the  continuing  evaluation of
alternative technologies.  The Company  is presently  concentrating its  product
development  efforts on  new disc drives  and improved disc  drive components as
described below.

    The Company develops new  disc drive products and  the processes to  produce
them  at four  locations: Scotts  Valley and  Simi Valley,  California; Oklahoma
City, Oklahoma; and  Bloomington, Minnesota. Generally  speaking, Scotts  Valley
and  Simi  Valley are  responsible for  development  of 3.5  inch, 2.5  inch and
smaller  form  factor  drives  intended   for  desktop,  laptop,  notebook   and
sub-notebook  personal  computer  systems;  Oklahoma  City  is  responsible  for
development of 3.5 inch disc drives with capacities and interfaces intended  for
use  in minicomputers,  supermicrocomputers, workstations and  file servers; and
Bloomington is  responsible for  3.5  inch and  5.25 inch  products  principally
intended  for use in systems ranging from workstations and superminicomputers to
mainframe and supercomputers as  well as new markets  such as digital video  and
video-on-demand.

    The  Company has focused its components  research and development efforts in
four main areas: motors, heads, media and ASICs (application specific integrated
circuits). The major emphasis of this R&D is reduced size and power consumption,
improved performance and  reliability, and  reduced cost.  Disc drive  customers
require  new products to have greater reliability with ever decreasing defective
parts per  million ("DPPMs")  and  ever increasing  mean time  between  failures
("MTBFs").

    The  principal  areas of  research and  development  relating to  motors are
improved bearings,  smaller  form  factors, lower  power  requirements,  quieter
operation, higher reliability, improved magnets and lower cost.

    The   Company's  head  research  and  development  efforts  are  focused  on
increasing recording  densities,  reducing the  size  and mass  of  the  slider,
developing  suspensions and assembly technology  for reduced head size, reducing
the cost and increasing the reliability. This research and development  includes
substantial effort to develop and manufacture magneto-resistive ("MR") heads and
advanced  air  bearing sliders  for  high areal  density  and small  form factor
products. There  can be  no assurance  that the  Company's MR  head  development
effort  will  be  successful  and  a  failure  of  the  Company  to successfully
manufacture and market  products incorporating  MR head technology  in a  timely
manner  could  have a  material  adverse effect  on  the Company's  business and
results of operations.

    Media research and  development efforts  are focused  on higher  performance
materials   for  increased  areal  density  and  better  substrate  and  surface
topographies for lower flying height applications, improved head/disc separation
margin and increased reliability.

                                       9

    ASIC development has been and will continue to be focused on optimizing  the
architecture  for  system performance,  cost and  reliability. In  addition, the
focus has been  and will continue  to be on  reducing the number  of parts,  the
amount of power consumption, and the size, and increasing areal densities by use
of  advanced signal processing techniques such as PRML (Partial Response Maximum
Likelihood) read/write channels. The Company designs nearly all of its ASICs for
motor and actuator control and manufactures  some of these circuits. It  designs
many  of the  other ASICs  in the  drive such  as interface  and read/write, and
procures these from third parties.

    In addition to developing new  products and components, the Company  devotes
significant  resources to  product engineering aimed  at improving manufacturing
processes, lowering manufacturing costs and increasing volume production of  new
and  existing products.  Process engineering  groups are  located with  the disc
drive development groups  and the  reliability engineering  groups in  locations
listed  above;  however, most  of  the Company's  volume  production is  done in
locations remote from these groups and  the development of the volume  processes
are completed at the volume manufacturing sites.

    No  assurance can  be given  that the Company  will be  able to successfully
complete the design or introduction of new products in a timely manner, that the
Company will  be able  to manufacture  new products  in volume  with  acceptable
manufacturing  yields,  or successfully  market  these products,  or  that these
products will perform to specifications on a long-term basis.

    During the fiscal years ended June 30,  1995, July 1, 1994 and July 2,  1993
the  Company's product development expenses  were $220,024,000, $171,907,000 and
$154,005,000 respectively.

PATENTS AND LICENSES

    The Company has  been issued  over 460  U.S. patents  and approximately  370
foreign   patents  relating  to  certain  of   its  disc  drive  components  and
manufacturing processes. The  Company also  has approximately 254  U.S. and  250
foreign  patent applications pending. Due to the rapid technological change that
characterizes the  rigid disc  drive  industry, the  Company believes  that  the
improvement  of existing  products, reliance  upon trade  secrets and unpatented
proprietary  know-how  and  development  of  new  products  are  generally  more
important  than patent protection in  establishing and maintaining a competitive
advantage. Nevertheless, the Company believes that  patents are of value to  its
business  and intends to continue its efforts to obtain patents, when available,
in connection  with  its research  and  development  program. There  can  be  no
assurance that any patents obtained will provide substantial protection or be of
commercial  benefit  to  the  Company,  or  that  their  validity  will  not  be
challenged.

    Because of rapid technological development in the disc drive industry, it is
possible that certain of  the Company's products  could involve infringement  of
existing  patents.  The  rigid disc  drive  industry has  been  characterized by
significant litigation  relating  to  patent  and  other  intellectual  property
rights.  From time  to time,  the Company  receives claims  that certain  of its
products infringe patents of third parties.  Although the Company has been  able
to  resolve some such claims or potential claims by obtaining licenses or rights
under the patents in question without a material adverse affect on the  Company,
other such claims are pending which if resolved unfavorably to the Company could
have  a material adverse effect on the  Company's business. For a description of
current disputes  see  the  "Litigation"  note  to  the  Company's  consolidated
financial  statements.  In  addition,  the  costs  of  engaging  in intellectual
property litigation may be  substantial regardless of  outcome. The Company  has
patent  cross  licenses  with  Areal  Technology,  Hewlett-Packard  Company, NEC
Corporation, Toshiba Corporation,  Hitachi, Ltd.,  Quantum Corporation,  Western
Digital  Corporation, Ceridian Corporation  (formerly Control Data Corporation),
IBM, Maxtor Corporation,  Read-Rite Corporation,  Applied Magnetics  Corporation
and  Headway Technologies, Inc., and is  licensed under certain Unysis, Bull and
Bull SA disc drive  and controller patents by  virtue of such companies'  former
ownership   of  Magnetic  Peripherals   Inc.,  now  merged   into  the  Company.
Additionally, the  Company has  agreements in  principle with  other major  disc
drive companies.

                                       10

COMPETITION

    The  rigid disc drive industry  is intensely competitive, with manufacturers
competing for a  limited number  of major customers.  The principal  competitive
factors  in the rigid disc drive market include product quality and reliability,
form factor,  storage capacity,  price  per unit,  price per  megabyte,  product
performance,  production volume capability and  responsiveness to customers. The
relative importance of  these factors  varies with different  customers and  for
different  products. The Company believes that it is generally competitive as to
these factors.

    The Company has experienced  and expects to  continue to experience  intense
competition  from a number of domestic and foreign companies, some of which have
far greater resources than  the Company. In addition  to independent rigid  disc
drive  manufacturers,  the  Company  also  faces  competition  from  present and
potential customers, including  IBM, Hewlett-Packard, Toshiba,  NEC and  Fujitsu
Limited  who continually  evaluate whether  to manufacture  their own  drives or
purchase them  from outside  sources. These  manufacturers also  sell drives  to
third parties which results in direct competition with the Company.

    Product  life cycles  are relatively short  in the disc  drive industry. The
Company expects its  competitors to offer  new and existing  products at  prices
necessary  to gain or retain market  share and customers. To remain competitive,
the Company believes it will be necessary  to continue to reduce its prices  and
aggressively  enhance its product  offerings. In addition  to the foregoing, the
ability of the Company to compete  successfully will also depend on its  ability
to  provide timely  product introductions and  to continue  to reduce production
costs.  The  Company's  establishment   and  ongoing  expansion  of   production
facilities  in Singapore, Thailand, Malaysia and  China are directed toward such
cost reductions.  The  Company's  four development  centers  and  market-focused
design strategies are structured for time-to-market product introductions.

    The  introduction  of products  using  alternative technologies  could  be a
significant source of competition. For example, optical recording and high-speed
semiconductor memory could compete  with the Company's  products in the  future.
Although  optical  disc technologies  are  attractive for  certain  archival and
imaging applications,  they have  lower  performance and  are more  costly  than
magnetic  disc  drives  and the  Company  does  not believe  that  they  will be
competitive with magnetic disc  drives in the near  future in markets  requiring
on-line,  random access,  non-volatile mass storage.  Semiconductor memory (SRAM
and DRAM) is much  faster than magnetic disc  drives, but currently is  volatile
(i.e.,  subject to  loss of data  in the event  of power failure)  and much more
costly. Flash EE  prom, a  nonvolatile semiconductor memory,  is currently  much
more  costly and, while it has higher  read performance than disc drives, it has
lower write performance.  Flash EE  prom could  become competitive  in the  near
future  for applications requiring less storage capacity (i.e., less than 40 MB)
than is  required in  the  Company's more  traditional computer  related  market
place.

ENVIRONMENTAL MATTERS

    The United States Environmental Protection Agency (EPA) and/or similar state
agencies  have identified  the Company as  a potentially  responsible party with
respect  to  environmental  conditions  at  several  different  sites  to  which
hazardous  wastes had been shipped or from which they were released. These sites
were acquired by  the Company from  Ceridian Corporation ("Ceridian")  (formerly
Control  Data  Corporation)  in  fiscal  1990.  Other  parties  have  also  been
identified at certain of these sites as potentially responsible parties. Many of
these parties either have  shared or likely will  share in the costs  associated
with  the sites.  Investigative and/or remedial  activities are  ongoing at such
sites.

    The Company's portion of the estimated cost of investigation and remediation
of known contamination  at the  sites to  be incurred  after June  30, 1995  was
approximately  $14,900,000.  Through June  30,  1995 the  Company  had recovered
approximately $2,500,000  from Ceridian  through  its indemnification  and  cost
sharing   agreements  with  Ceridian  and,   in  addition,  expects  to  recover
approximately $9,800,000 from Ceridian over  the next 30 years. After  deducting
the  expected  recoveries  from Ceridian,  the  expected  aggregate undiscounted
liability was approximately $5,100,000 at

                                       11

June 30, 1995 with payments expected to  begin in 1999. The total liability  for
all  sites recorded  by the Company  after considering the  estimated effects of
inflation,  reimbursements  by  Ceridian   and  discounting  was   approximately
$3,000,000 at June 30, 1995.

    The  Company believes  that the indemnification  and cost-sharing agreements
entered into with  Ceridian and the  reserves that the  Company has  established
with  respect to its future environmental costs  are such that, based on present
information available to  it, future  environmental costs  related to  currently
known  contamination will  not have a  material adverse effect  on its financial
condition or results of operations.

EMPLOYEES

    From July 1, 1994 to June 30, 1995, the number of persons employed worldwide
by the  Company increased  from approximately  53,000 to  approximately  65,000.
Approximately  55,000 of the  Company's employees were  located in the Company's
Far East operations as of June 30,  1995. In addition, the Company makes use  of
supplemental  employees,  principally  in  manufacturing, who  are  hired  on an
as-needed basis. Management believes that the future success of the Company will
depend in part on its ability to  attract and retain qualified employees at  all
levels,  of  which there  can be  no  assurance. The  Company believes  that its
employee relations are good.

ITEM 2.  PROPERTIES

    Seagate's executive  offices  are  located  in  Scotts  Valley,  California.
Principal   manufacturing  facilities   are  located   in  Singapore,  Thailand,
Minnesota, Oklahoma,  California, Malaysia,  Scotland  and Northern  Ireland.  A
major portion of the Company's facilities are occupied under leases which expire
at  various times  through 2005.  The following is  a summary  of square footage
owned or leased by the Company:



                                                   FACILITIES (SQUARE FEET)
------------------------------------------------------------------------------------------------------------------------------
                                                                      MANUFACTURING     PRODUCT
LOCATION                                                               & WAREHOUSE    DEVELOPMENT   ADMINISTRATIVE     TOTAL
--------------------------------------------------------------------  -------------   -----------   --------------   ---------
                                                                                                         
Singapore...........................................................      686,211        14,820         240,334        941,365(1)
Indonesia...........................................................       21,667        --             --              21,667
China...............................................................       57,684        --               4,280         61,964
Minnesota...........................................................      465,280        73,498          47,600        586,378(2)
Thailand............................................................      909,035        --             170,902      1,079,937(3)
Oklahoma............................................................      274,501        77,497          93,492        445,490
California --
  Scotts Valley.....................................................      218,336       157,378         150,500        526,214(4)
  Fremont...........................................................      219,607        10,000          23,050        252,657
  Anaheim...........................................................      100,000        --              20,000        120,000
  Simi Valley.......................................................          300        43,898         --              44,198
Columbus, OH........................................................       34,914        --             --              34,914
Malaysia............................................................      408,809        --              55,400        464,209(5)
Scotland............................................................       30,731         3,680           7,790         42,201
Amsterdam...........................................................       32,635        --               8,828         41,463
Northern Ireland....................................................      110,000        --              10,000        120,000
Republic of Ireland.................................................      155,000        --             --             155,000
Other --
  Domestic..........................................................       35,598        15,600         155,393        206,591(6)
  Pacific Rim.......................................................      --             --              31,006         31,006
  Europe............................................................      --             --              37,531         37,531(7)
  Canada............................................................      --             --              25,186         25,186
                                                                      -------------   -----------   --------------   ---------
Total...............................................................    3,760,308       396,371       1,081,292      5,237,971
                                                                      -------------   -----------   --------------   ---------
                                                                      -------------   -----------   --------------   ---------

------------------------
(1)  Includes approximately 202,800 square feet  owned by the Company on  leased
     land; excludes 1,000,000 square feet under construction.

(2)  Excludes approximately 217,800 square feet leased to others.


                                       12

  
(3)  Includes  approximately 297,000 square feet owned  by the Company on leased
     land.

(4)  The aggregate of  Scotts Valley facilities  includes approximately  365,600
     square  feet owned  by the  Company. Of  this amount  approximately 144,200
     square feet is on leased land.

(5)  Excludes approximately 550,000 square feet under construction.

(6)  Excludes approximately  51,800  square feet  leased  to others  and  12,300
     square feet unoccupied.

(7)  Excludes  approximately 130,300 square feet currently unoccupied and 16,000
     square feet leased to others.



ITEM 3.  LEGAL PROCEEDINGS

    The information required by this item is incorporated by reference to  pages
30-31  and 33-36  of the  Annual Report to  Shareholders, filed  as Exhibit 13.1
hereto.

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

    Not applicable.

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS

    The information required by this Item is incorporated by reference to  pages
1-2 of the Annual Report to Shareholders, filed as Exhibit 13.1 hereto.

ITEM 6.  SELECTED FINANCIAL DATA

    The  information required by this Item is incorporated by reference to pages
1-2 of the Annual Report to Shareholders, filed as Exhibit 13.1 hereto.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

    The information required by this Item is incorporated by reference to  pages
3-11 of the Annual Report to Shareholders, filed as Exhibit 13.1 hereto.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    The  information required by this Item is incorporated by reference to pages
1-2 and  12-39 of  the Annual  Report  to Shareholders,  filed as  Exhibit  13.1
hereto.

ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

    None.

                                       13

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The present directors and executive officers of the Company are as follows:



                                                                                                                      DIRECTOR OR
                                                                                                                       EXECUTIVE
                                                                                                                        OFFICER
          NAME             AGE                                       POSITION                                            SINCE
-------------------------  --- -------------------------------------------------------------------------------------  -----------
                                                                                                             
Alan F. Shugart            64  President, Chief Executive Officer and Chairman of the Board                            1979
Bernardo A. Carballo       46  Executive Vice President, Sales, Marketing, Product Line Management and Customer        1991
                                Service
Brendan C. Hegarty         52  Executive Vice President, Chief Operating Officer, Components                           1989
Stephen J. Luczo           38  Executive Vice President, Corporate Development and Chief Operating Officer, Software   1993
Ronald D. Verdoorn         44  Executive Vice President, Chief Operating Officer, Storage Products                     1991
Donald L. Waite            62  Executive Vice President, Chief Administrative Officer and Chief Financial Officer      1983
Stephen B. Greenspan       54  Senior Vice President, Quality                                                          1991
Hossein M. Moghadam        51  Senior Vice President and Chief Technical Officer, Data Storage Products                1993
Robert A. Sandie           59  Senior Vice President, Corporate Materials                                              1991
Gary B. Filler             54  Director                                                                                1985
Kenneth Haughton           67  Director                                                                                1986
Robert A. Kleist           67  Director                                                                                1981
Lawrence Perlman           57  Director                                                                                1989
Thomas P. Stafford         64  Director                                                                                1988
Laurel L. Wilkening        50  Director                                                                                1993


    All  directors hold office  until the annual meeting  of shareholders of the
Company following their election, or until their successors are duly elected and
qualified. Officers are elected annually by the Board of Directors and serve  at
the discretion of the Board.

    Mr.  Shugart was Chairman  of the Board  and Chief Executive  Officer of the
Company from its  inception in 1979  until 1991.  From 1979 until  1983 he  also
served  as the  Company's President.  He now  serves as  Chairman of  the Board,
President and Chief Executive Officer. He was re-appointed Chairman of the Board
in October 1992. Mr. Shugart is also currently a Director of Valence Technology,
Inc.

    Mr. Carballo was General Manager, Product Line Management for the  Company's
Oklahoma City operations at the time of the Company's acquisition of Imprimis in
1989.  In  1990 he  was  promoted to  Vice  President, Product  Line Management,
Oklahoma City  operations, in  September 1991  he was  promoted to  Senior  Vice
President, Sales, Marketing and Product Line Management and in March 1995 he was
promoted  to Executive Vice  President Worldwide Sales,  Marketing, Product Line
Management and Customer Service. Prior to joining the Company, Mr. Carballo  had
seventeen years with Control Data/Imprimis.

                                       14

    Dr.  Hegarty  joined  Control  Data/Imprimis  in  1988  as  Vice  President,
Thin-Film Heads.  In October  1989  he was  named  Seagate's Vice  President  of
Component  Operations in Bloomington, Minnesota, and in August 1990 was promoted
to Senior  Vice President  and Chief  Technical Officer.  In March  1995 he  was
promoted to Executive Vice President, Chief Operating Officer, Components Group.
From  October  1990 to  October  1993 Dr.  Hegarty was  also  a Director  of the
Company. Prior  to joining  Control Data/Imprimis,  Dr. Hegarty  had  twenty-one
years with IBM in the U.K., Netherlands and the U.S.

    Mr.  Luczo  joined the  Company in  October 1993  as Senior  Vice President,
Corporate  Development.  In  March  1995  he  was  promoted  to  Executive  Vice
President,  Corporate Development  and Chief  Operating Officer  of the Software
Group. Prior  to joining  the Company  he was  Senior Managing  Director of  the
Global Technology Group of Bear, Stearns & Co. Inc., an investment banking firm,
from  September  1993  to October  1993.  He  served as  Co-Head  of  the Global
Technology Group of Bear, Stearns & Co. Inc. from February 1992 to October 1993.
Prior to joining Bear, Stearns & Co.  Inc., Mr. Luczo was with Salomon  Brothers
Inc.,  an investment banking firm, from 1984  to February 1992, most recently as
Vice President and Head of West Coast Technology.

    Mr. Verdoorn joined  the Company  in 1983.  From 1987  to 1991  he was  Vice
President, Far East Manufacturing and in November 1991 he was promoted to Senior
Vice  President,  Manufacturing Operations.  In March  1995  he was  promoted to
Executive Vice President, Chief Operating Officer of the Storage Products Group.

    Mr. Waite joined the Company in 1983 as Vice President of Finance and  Chief
Financial  Officer, and was promoted to  Senior Vice President, Finance in 1984.
In March 1995 he was promoted to Executive Vice President, Chief  Administrative
Officer and Chief Financial Officer.

    Mr.  Greenspan  joined  the Company  in  September 1987  as  Vice President,
Process  Development.  In  1991  he  was  made  Vice  President,   Manufacturing
Operations  for Singapore and  California operations. He  was promoted to Senior
Vice President, Quality and Customer Service in November 1991. Prior to  joining
the  Company, Mr. Greenspan had over twenty years experience in computer-related
industries, including nineteen years with IBM.

    Dr. Moghadam was Vice President,  Engineering of Control Data/Imprimis  from
December  1986 until October 1989 when  he became Vice President, Engineering at
Seagate concurrent with  the Company's acquisition  of Imprimis Technology.  Dr.
Moghadam was promoted to Senior Vice President and Chief Technical Officer, Data
Storage Products in August 1993.

    Mr.  Sandie joined the Company in 1983  as Vice President, Materials. He was
promoted to Senior Vice President, Corporate Materials in November 1991.

    Mr. Filler was appointed Senior  Vice President and Chief Financial  Officer
of Diamond Multimedia Systems, Inc. in January 1995. Diamond Multimedia Systems,
Inc.  designs, manufacturers and  markets high-performance multimedia solutions.
From February 1994  until June 1994  he served as  Executive Vice President  and
Chief  Financial Officer at  ASK Group, Inc.  From December 1989  to May 1993 he
served as Chairman  of the  Board of Directors  and Chief  Executive Officer  of
Burke  Industries, a manufacturer of rubber products for military and industrial
usage. Mr. Filler was Chairman of the Board of Seagate from September 1991 until
October 1992. From October 1990 until  September 1991 Mr. Filler served as  Vice
Chairman of the Board of Directors of the Company.

    Dr.  Haughton  is an  engineering  consultant. He  was  a Vice  President of
Engineering at DaVinci  Graphics, a  plotter manufacturer, from  May 1990  until
August  1991. Prior to that he was a  consultant from May 1989 to May 1990. From
August 1988 to May 1989 Dr. Haughton was Professor of Mechanical Engineering  at
Santa   Clara  University.  Dr.  Haughton  is   also  a  Director  of  Solectron
Corporation.

    Mr. Kleist has  been President, Chief  Executive Officer and  a Director  of
Printronix, Inc., a manufacturer of computer printers, since 1974.

                                       15

    Mr.  Perlman  presently  holds the  position  of  Chairman of  the  Board of
Directors and Chief Executive Officer of Ceridian Corporation (formerly  Control
Data  Corporation), an information services  and defense electronics company. He
previously  held  several  executive  positions  at  Control  Data   Corporation
including  President and CEO of Imprimis.  Prior to Control Data Corporation, he
was in  the  private practice  of  law and  at  Medtronic, where  he  served  as
Executive  Vice President  for U.S.  Pacemaker Operations.  He also  serves on a
number of other corporate boards including Inter-Regional Financial Group, Inc.,
Computer Network  Technology Corporation  , Valspar  Corporation,  Bio-Vascular,
Inc. and Kmart Corporation.

    General  Stafford, a former  astronaut, has been  Vice Chairman of Stafford,
Burke and Hecker, Inc.,  a consulting firm based  in Alexandria, Virginia  since
1982.  He also serves  as a Director for  the following companies: Allied-Signal
Corporation,  Pacific  Scientific,  Inc.,  Tremont,  Inc.,  CMI,  Inc.,   Fisher
Scientific  International, Inc., Wackenhut,  Inc. and Wheelabrator Technologies,
Inc.

    Dr. Wilkening  has served  as Chancellor  of the  University of  California,
Irvine  since July 1, 1993. From September 1988 to June 30, 1993 she was Provost
and Vice President  of Academic Affairs  at the University  of Washington.  From
1991  to  1993 Dr.  Wilkening  also served  as  Chairwoman of  the  Space Policy
Advisory Board of the National Space Council.

ITEM 11.  EXECUTIVE COMPENSATION

    The information required by  this Item is incorporated  by reference to  the
Company's Proxy Statement to be filed with the Commission within 120 days of the
end of the Registrant's fiscal year pursuant to General Instruction G(3) to Form
10-K.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The  information required by  this Item is incorporated  by reference to the
Company's Proxy Statement to be filed with the Commission within 120 days of the
end of the Registrant's fiscal year pursuant to General Instruction G(3) to Form
10-K.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    The information required by  this Item is incorporated  by reference to  the
Company's Proxy Statement to be filed with the Commission within 120 days of the
end of the Registrant's fiscal year pursuant to General Instruction G(3) to Form
10-K.

                                       16

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

    (a) The following documents are filed as a part of this Report:

    1.   FINANCIAL STATEMENTS.   The following Consolidated Financial Statements
       of Seagate Technology,  Inc. and subsidiaries  and Report of  Independent
       Auditors are incorporated by reference in Item 8:

        Report of Independent Auditors

        Consolidated Balance Sheets -- June 30, 1995 and July 1, 1994.

        Consolidated  Statements of Income -- Years Ended June 30, 1995, July 1,
       1994 and July 2, 1993.

        Consolidated Statements of Shareholders' Equity -- Years Ended June  30,
       1995, July 1, 1994 and July 2, 1993.

        Consolidated Statements of Cash Flows -- Years Ended June 30, 1995, July
       1, 1994 and July 2, 1993.

        Notes to Consolidated Financial Statements.

    Separate  financial  statements of  Seagate Technology,  Inc. have  not been
presented because  it is  primarily an  operating company  and its  subsidiaries
included in the Consolidated Financial Statements are wholly-owned.

    2.    FINANCIAL STATEMENT  SCHEDULE.   The following  consolidated financial
       statement schedule of Seagate Technology, Inc. and subsidiaries is  filed
       as  part  of this  Report  and should  be  read in  conjunction  with the
       Consolidated  Financial  Statements  of  Seagate  Technology,  Inc.   and
       subsidiaries:



SCHEDULE                                                                                                                      PAGE
--------                                                                                                                      ----
                                                                                                                     
  II       -- Valuation and Qualifying Accounts.............................................................................   21


    Schedules not listed above have been omitted because they are not applicable
or  are not  required or  the information  required to  be set  forth therein is
included in the Consolidated Financial Statements or notes thereto.

    3.  EXHIBITS:                                                         NOTES:

                                                                 
     3.1   Certificate of Incorporation of Registrant, as amended.         (A)
     3.2   By-Laws of Registrant, as amended.                              (B)
     4.1   Indenture dated May 6, 1987 between the Registrant and
            Chemical Bank.                                                 (A)
     4.2   Indenture dated as of December 1, 1993 between Registrant
            and Chemical Bank.                                             (K)
    10.1   1981 Incentive Stock Option Plan and form of Stock Option
            Agreement.                                                     (C)
    10.2   1983 Incentive Stock Option Plan and form of Stock Option
            Agreement.                                                     (D)
    10.3   Seagate Technology Employee Stock Purchase Plan.                (C)
    10.4   Grenex, Inc. 1984 Stock Option Plan and form of Stock
            Agreement.                                                     (E)
    10.5   Ground and building lease dated March 31, 1983 between the
            Registrant and First Scotts Valley, Inc.                       (D)

  

                                       17

                                                                 
    10.6   Ground lease dated July 15, 1982 between the Registrant and
            First Scotts Valley, Inc.                                      (F)
    10.7   Grant Deed dated June 25, 1983 between the Registrant and
            Albert L. and Anne Russo.                                      (A)
    10.8   Lease Agreement dated May 20, 1985 between Seagate
            Singapore, Pte., Ltd. and Jurong Town Corporation, and
            related Mortgage Agreement.                                    (G)
    10.9   Lease Agreements dated from April 1, 1983 through May 16,
            1985 between Seagate Technology Singapore, Pte., Ltd. and
            Jurong Town Corporation.                                       (G)
    10.10  Lease Agreement dated September 11, 1984 between Seagate
            Technology Singapore, Pte., Ltd. and the Science Counsel of
            Singapore.                                                     (H)
    10.11  Lease Agreement dated from August 16, 1985 through June 8,
            1988 between Seagate Technology Singapore, Pte., Ltd. and
            Jurong Town Corporation.                                       (H)
    10.12  Deed of Assignment dated February 18, 1987 between Seagate
            Technology Singapore, Pte., Ltd. and the Hong Kong and
            Shanghai Banking Corporation.                                  (H)
    10.13  Factory Development Master Agreement dated December 14, 1987
            and Amendment 1 thereto dated January 21, 1988 between
            Seagate Technology (Thailand) Ltd. and Mrs. Curairat
            Bonython.                                                      (H)
    10.14  Master Agreement dated June 10, 1988 between Seagate
            Technology (Thailand) Ltd. and Chokchai International Co.,
            Ltd.                                                           (H)
    10.15  Lease Agreement dated July 18, 1987 and Amendment No. 1
            thereto dated June 10, 1988 between Seagate Technology
            (Thailand) Ltd. and Chokchai International Co., Ltd.           (H)
    10.16  Industrial Lease dated December 31, 1983 between Mission
            Business Company and Grenex, Inc.                              (G)
    10.17  1991 Incentive Stock Option Plan and Form of Option
            Agreement, as amended.                                         (L)
    10.18  Acquisition Agreement dated as of September 29, 1989 by and
            among Seagate Technology, Inc. and Control Data
            Corporation, Imprimis Technology Incorporated and Magnetic
            Peripherals, Inc.                                              (I)
    10.19  Amended and Restated Directors' Option Plan and Form of
            Option Agreement.                                              (J)
    11.1   Computation of Net Income per Share (see page 22).
    13.1   1995 Annual Report to Shareholders.
    21.1   Subsidiaries of the Registrant.
    23.1   Consent of Ernst & Young LLP, Independent Auditors.
    24.1   Power of Attorney (included on page 20).
    27     Financial Data Schedule

------------------------
(A)  Incorporated by  reference  to  exhibits  filed in  response  to  Item  16,
     "Exhibits,"  of the Company's Registration Statement  on Form S-3 (File No.
     33-13430) filed with the  Securities and Exchange  Commission on April  14,
     1987.

  

                                       18

  
(B)  Incorporated  by reference  to exhibits filed  in response to  Item 14 (a),
     "Exhibits," of the Company's Form 10-K, as amended, for the year ended June
     30, 1990.

(C)  Incorporated by  reference to  exhibits filed  in response  to Item  30(b),
     "Exhibits,"  of  the  Company's  Registration  Statement  on  Form  S-1 and
     Amendment No. 1 thereto  (File No. 2-73663), as  declared effective by  the
     Securities and Exchange Commission on September 24, 1981.

(D)  Incorporated  by reference  to exhibits  filed in  response to  Item 14(a),
     "Exhibits," of the Company's Form 10-K for the year ended June 30, 1983.

(E)  Incorporated by  reference  to  exhibits  filed in  response  to  Item  20,
     "Exhibits,"  of the Company's Registration  Statement on Form S-8/S-3 (file
     No. 2-98486) filed with the Securities and Exchange Commission on June  19,
     1985.

(F)  Incorporated  by reference  to exhibits  filed in  response to  Item 16(a),
     "Exhibits," of the Company's Registration  Statement on Form S-1 (File  No.
     2-78672)  filed with  the Securities and  Exchange Commission  on August 3,
     1982.

(G)  Incorporated by  reference to  exhibits filed  in response  to Item  14(a),
     "Exhibits," of the Company's 10-K for the year ended June 30, 1985.

(H)  Incorporated  by reference  to exhibits  filed in  response to  Item 14(a),
     "Exhibits," of the Company's Form 10-K for the year ended June 30, 1988.

(I)  Incorporated by  reference to  exhibits  filed in  response to  Item  7(c),
     "Exhibits,"  of the Company's  Current Report on Form  8-K dated October 2,
     1989.

(J)  Incorporated by  reference to  exhibits filed  in response  to Item  14(a),
     "Exhibits," of the Company's Form 10-K for the year ended June 30, 1991.

(K)  Incorporated  by  reference to  exhibits filed  in  response to  Item 7(c),
     "Exhibits," of the Company's Current Report on Form 8-K dated December  17,
     1993.

(L)  Incorporated  by reference  to exhibits  filed in  response to  Item 14(a),
     "Exhibits," of the Company's Form 10-K for the year ended July 2, 1993.

(b)  Reports on Form  8-K. No  reports on  Form 8-K  were filed  by the  Company
     during the quarter ended June 30, 1995.



                                       19

                                   SIGNATURES

    PURSUANT  TO  THE REQUIREMENTS  OF  SECTION 13  OR  15(D) 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.

                                          SEAGATE TECHNOLOGY, INC.

                                          By:         /s/ ALAN F. SHUGART

                                             -----------------------------------
                                              (ALAN F. SHUGART, CHAIRMAN OF THE
                                                            BOARD,
                                                PRESIDENT AND CHIEF EXECUTIVE
                                                           OFFICER)

Dated: August 4, 1995

                               POWER OF ATTORNEY

    Know All Men  By These Presents,  that each person  whose signature  appears
below  constitutes and appoints Alan F. Shugart and Donald L. Waite, jointly and
severally, his or her attorney-in-fact, each with the power of substitution, for
him or her in any and all capacities,  to sign any amendments to this Report  on
Form  10-K and to  file the same,  with exhibits thereto  and other documents in
connection therewith,  with  the  Securities  and  Exchange  Commission,  hereby
ratifying  and  confirming  all  that each  of  said  attorneys-in-fact,  or his
substitute or substitutes, may do or cause to be done by virtue hereof.

    PURSUANT TO THE REQUIREMENTS  OF THE SECURITIES EXCHANGE  ACT OF 1934,  THIS
REPORT  HAS  BEEN  SIGNED  BELOW  BY THE  FOLLOWING  PERSONS  ON  BEHALF  OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.



                      SIGNATURE                                        TITLE                         DATE
------------------------------------------------------  ------------------------------------  -------------------

                                                                                        
                       /s/ ALAN F. SHUGART
     -------------------------------------------        Chairman of the Board, President and    August 4, 1995
                  (Alan F. Shugart)                      Chief Executive Officer

                                                        Executive Vice President, Chief
                       /s/ DONALD L. WAITE               Administrative Officer and Chief
     -------------------------------------------         Financial Officer (Principal           August 4, 1995
                  (Donald L. Waite)                      Financial and Accounting Officer)

                        /s/ GARY B. FILLER
     -------------------------------------------        Director                                August 4, 1995
                   (Gary B. Filler)

                      /s/ KENNETH HAUGHTON
     -------------------------------------------        Director                                August 4, 1995
                  (Kenneth Haughton)

                      /s/ ROBERT A. KLEIST
     -------------------------------------------        Director                                August 4, 1995
                  (Robert A. Kleist)

                      /s/ LAWRENCE PERLMAN
     -------------------------------------------        Director                                August 4, 1995
                  (Lawrence Perlman)

                     /s/ THOMAS P. STAFFORD
     -------------------------------------------        Director                                August 4, 1995
                 (Thomas P. Stafford)

                    /s/ LAUREL L. WILKENING
     -------------------------------------------        Director                                August 4, 1995
                (Laurel L. Wilkening)


                                       20

                            SEAGATE TECHNOLOGY, INC.
                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS



                          COL. A                               COL. B        COL. C         COL. D          COL. E       COL. F
----------------------------------------------------------  ------------   -----------  ---------------   -----------  -----------
                                                                                    ADDITIONS
                                                                           ----------------------------
                                                             BALANCE AT    CHARGED TO     CHARGED TO                   BALANCE AT
                                                            BEGINNING OF    COSTS AND   OTHER ACCOUNTS-   DEDUCTIONS-    END OF
DESCRIPTION                                                    PERIOD       EXPENSES       DESCRIBE        DESCRIBE      PERIOD
----------------------------------------------------------  ------------   -----------  ---------------   -----------  -----------
                                                                                                        
YEAR ENDED JUNE 30, 1995:
  Deducted from asset accounts:
Allowance for doubtful accounts...........................  $ 42,830,000   $12,016,000    $  --           $ 1,447,000(1) $53,399,000
                                                            ------------   -----------  ---------------   -----------  -----------
                                                            ------------   -----------  ---------------   -----------  -----------
YEAR ENDED JULY 1, 1994:
  Deducted from asset accounts:
Allowance for doubtful accounts...........................  $ 46,514,000   $14,091,000    $  --           $17,775,000(2) $42,830,000
                                                            ------------   -----------  ---------------   -----------  -----------
                                                            ------------   -----------  ---------------   -----------  -----------
YEAR ENDED JULY 2, 1993:
  Deducted from asset accounts:
Allowance for doubtful accounts...........................  $ 39,866,000   $34,922,000    $  --           $28,274,000(3) $46,514,000
                                                            ------------   -----------  ---------------   -----------  -----------
                                                            ------------   -----------  ---------------   -----------  -----------

------------------------
(1)  $1,447,000 uncollectible accounts written off, net of recoveries.

(2)  $17,775,000 uncollectible accounts written off, net of recoveries.

(3)  $25,748,000  uncollectible  accounts  written   off,  net  of   recoveries,
     $2,526,000 reclassification to notes receivable.


                                       21

                            SEAGATE TECHNOLOGY, INC.
                               INDEX TO EXHIBITS



 EXHIBITS                                                                                                        NOTES
-----------                                                                                                    ---------
                                                                                                         
       3.1   Certificate of Incorporation of Registrant, as amended.                                                 (A)
       3.2   By-Laws of Registrant, as amended.                                                                      (B)
       4.1   Indenture dated May 6, 1987 between the Registrant and Chemical Bank.                                   (A)
       4.2   Indenture dated as of December 1, 1993 between Registrant and Chemical Bank.                            (K)
      10.1   1981 Incentive Stock Option Plan and form of Stock Option Agreement.                                    (C)
      10.2   1983 Incentive Stock Option Plan and form of Stock Option Agreement.                                    (D)
      10.3   Seagate Technology Employee Stock Purchase Plan.                                                        (C)
      10.4   Grenex, Inc. 1984 Stock Option Plan and form of Stock Agreement.                                        (E)
      10.5   Ground and building lease dated March 31, 1983 between the Registrant and First Scotts Valley,
              Inc.                                                                                                   (D)
      10.6   Ground lease dated July 15, 1982 between the Registrant and First Scotts Valley, Inc.                   (F)
      10.7   Grant Deed dated June 25, 1983 between the Registrant and Albert L. and Anne Russo.                     (A)
      10.8   Lease Agreement dated May 20, 1985 between Seagate Singapore, Pte., Ltd. and Jurong Town
              Corporation, and related Mortgage Agreement.                                                           (G)
      10.9   Lease Agreements dated from April 1, 1983 through May 16, 1985 between Seagate Technology
              Singapore, Pte., Ltd. and Jurong Town Corporation.                                                     (G)
      10.10  Lease Agreement dated September 11, 1984 between Seagate Technology Singapore, Pte., Ltd. and
              the Science Counsel of Singapore.                                                                      (H)
      10.11  Lease Agreement dated from August 16, 1985 through June 8, 1988 between Seagate Technology
              Singapore, Pte., Ltd. and Jurong Town Corporation.                                                     (H)
      10.12  Deed of Assignment dated February 18, 1987 between Seagate Technology Singapore, Pte., Ltd. and
              the Hong Kong and Shanghai Banking Corporation.                                                        (H)
      10.13  Factory Development Master Agreement dated December 14, 1987 and Amendment 1 thereto dated
              January 21, 1988 between Seagate Technology (Thailand) Ltd. and Mrs. Curairat Bonython.                (H)
      10.14  Master Agreement dated June 10, 1988 between Seagate Technology (Thailand) Ltd. and Chokchai
              International Co., Ltd.                                                                                (H)
      10.15  Lease Agreement dated July 18, 1987 and Amendment No. 1 thereto dated June 10, 1988 between
              Seagate Technology (Thailand) Ltd. and Chokchai International Co., Ltd.                                (H)
      10.16  Industrial Lease dated December 31, 1983 between Mission Business Company and Grenex, Inc.              (G)
      10.17  1991 Incentive Stock Option Plan and Form of Option Agreement, as amended.                              (L)
      10.18  Acquisition Agreement dated as of September 29, 1989 by and among Seagate Technology, Inc. and
              Control Data Corporation, Imprimis Technology Incorporated and Magnetic Peripherals, Inc.              (I)
      10.19  Amended and Restated Directors' Option Plan and Form of Option Agreement.                               (J)
      11.1   Computation of Net Income per Share (see page 22).
      13.1   1995 Annual Report to Shareholders.
      21.1   Subsidiaries of the Registrant.
      23.1   Consent of Ernst & Young LLP, Independent Auditors.


                                                                                                         
      24.1   Power of Attorney (included on page 20).
      27     Financial Data Schedule

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

(A)  Incorporated  by  reference  to  exhibits filed  in  response  to  Item 16,
     "Exhibits," of the Company's Registration  Statement on Form S-3 (File  No.
     33-13430)  filed with the  Securities and Exchange  Commission on April 14,
     1987.

(B)  Incorporated by reference  to exhibits filed  in response to  Item 14  (a),
     "Exhibits," of the Company's Form 10-K, as amended, for the year ended June
     30, 1990.

(C)  Incorporated  by reference  to exhibits  filed in  response to  Item 30(b),
     "Exhibits," of  the  Company's  Registration  Statement  on  Form  S-1  and
     Amendment  No. 1 thereto  (File No. 2-73663), as  declared effective by the
     Securities and Exchange Commission on September 24, 1981.

(D)  Incorporated by  reference to  exhibits filed  in response  to Item  14(a),
     "Exhibits," of the Company's Form 10-K for the year ended June 30, 1983.

(E)  Incorporated  by  reference  to  exhibits filed  in  response  to  Item 20,
     "Exhibits," of the Company's Registration  Statement on Form S-8/S-3  (file
     No.  2-98486) filed with the Securities and Exchange Commission on June 19,
     1985.

(F)  Incorporated by  reference to  exhibits filed  in response  to Item  16(a),
     "Exhibits,"  of the Company's Registration Statement  on Form S-1 (File No.
     2-78672) filed with  the Securities  and Exchange Commission  on August  3,
     1982.

(G)  Incorporated  by reference  to exhibits  filed in  response to  Item 14(a),
     "Exhibits," of the Company's 10-K for the year ended June 30, 1985.

(H)  Incorporated by  reference to  exhibits filed  in response  to Item  14(a),
     "Exhibits," of the Company's Form 10-K for the year ended June 30, 1988.

(I)  Incorporated  by  reference to  exhibits filed  in  response to  Item 7(c),
     "Exhibits," of the Company's  Current Report on Form  8-K dated October  2,
     1989.

(J)  Incorporated  by reference  to exhibits  filed in  response to  Item 14(a),
     "Exhibits," of the Company's Form 10-K for the year ended June 30, 1991.

(K)  Incorporated by  reference to  exhibits  filed in  response to  Item  7(c),
     "Exhibits,"  of the Company's Current Report on Form 8-K dated December 17,
     1993.

(L)  Incorporated by  reference to  exhibits filed  in response  to Item  14(a),
     "Exhibits," of the Company's Form 10-K for the year ended July 2, 1993.

EX-11.

                                                                    EXHIBIT 11.1

                            SEAGATE TECHNOLOGY, INC.
                      COMPUTATION OF NET INCOME PER SHARE



                                                                                                      YEAR ENDED
                                                                                         -------------------------------------
                                                                                          JUNE 30,      JULY 1,      JULY 2,
                                                                                            1995         1994         1993
                                                                                         -----------  -----------  -----------
                                                                                         (IN THOUSANDS EXCEPT PER SHARE DATA)
                                                                                                          
PRIMARY
Weighted average number of common shares outstanding during the year...................       71,758       70,629       67,379
Incremental common shares attributable to exercise of outstanding options (assuming
 proceeds would be used to purchase treasury stock)....................................        2,081        2,435        2,442
                                                                                         -----------  -----------  -----------
    Total shares.......................................................................       73,839       73,064       69,821
                                                                                         -----------  -----------  -----------
                                                                                         -----------  -----------  -----------
Net income:
  Income before extraordinary gain.....................................................  $   260,082  $   225,110  $   195,434
  Extraordinary gain, net of tax effect................................................      --           --           --
                                                                                         -----------  -----------  -----------
    Net income.........................................................................  $   260,082  $   225,110  $   195,434
                                                                                         -----------  -----------  -----------
                                                                                         -----------  -----------  -----------
Net income per share:
  Income before extraordinary gain.....................................................  $      3.52  $      3.08  $      2.80
  Extraordinary gain, net of tax effect................................................      --           --           --
                                                                                         -----------  -----------  -----------
    Net income.........................................................................  $      3.52  $      3.08  $      2.80
                                                                                         -----------  -----------  -----------
                                                                                         -----------  -----------  -----------
FULLY DILUTED
Weighted average number of common shares outstanding during the year...................       71,758       70,629       67,379
Incremental common shares attributable to exercise of outstanding options (assuming
 proceeds would be used to purchase treasury stock) and conversion of 6 3/4% and 5%
 convertible subordinated debentures...................................................       19,716       14,383        8,886
                                                                                         -----------  -----------  -----------
    Total shares.......................................................................       91,474       85,012       76,265
                                                                                         -----------  -----------  -----------
                                                                                         -----------  -----------  -----------
Net income:
  Income before extraordinary gain.....................................................  $   260,082  $   225,110  $   195,434
  Add 6 3/4% convertible subordinated debentures interest, net of income tax effect....       11,239       11,239       11,419
  Add 5% convertible subordinated debentures interest, net of income tax effect........        8,447        4,592      --
                                                                                         -----------  -----------  -----------
  Income before extraordinary gain, as adjusted........................................      279,768      240,941      206,853
  Extraordinary gain, net of tax effect................................................      --           --           --
                                                                                         -----------  -----------  -----------
    Net income, as adjusted............................................................  $   279,768  $   240,941  $   206,853
                                                                                         -----------  -----------  -----------
                                                                                         -----------  -----------  -----------
Net income per share:
  Income before extraordinary gain, as adjusted........................................  $      3.06  $      2.83  $      2.71
  Extraordinary gain, net of tax effect, as adjusted...................................      --           --           --
                                                                                         -----------  -----------  -----------
    Net income.........................................................................  $      3.06  $      2.83  $      2.71
                                                                                         -----------  -----------  -----------
                                                                                         -----------  -----------  -----------


                                       22

EX-13.

                                                                 EXHIBIT 13.1
SEAGATE TECHNOLOGY, INC.
ANNUAL REPORT TO SHAREHOLDERS

SELECTED FINANCIAL DATA





FISCAL YEAR ENDED                              JUNE 30,     JULY 1,       JULY 2,    JUNE 30,     JUNE 30,
In thousands except per share data                 1995        1994         1993         1992         1991
----------------------------------------------------------------------------------------------------------
                                                                                 

Net sales                                    $4,539,570  $3,500,103   $3,043,604   $2,875,273   $2,676,980

Gross profit                                    931,909     704,282      672,928      487,637      484,491

Income from operations                          372,622     310,957      269,027      106,046      111,285

Income before extraordinary gain                260,082     225,110      195,434       63,183       62,845

Net income                                      260,082     225,110      195,434       63,183       67,458

Primary income per share before
   extraordinary gain                              3.52        3.08         2.80          .92          .95

Primary net income per share                       3.52        3.08         2.80          .92         1.02

Fully diluted income per share
   before extraordinary gain                       3.06        2.83         2.71          .91          .94

Fully diluted net income per share                 3.06        2.83         2.71          .91         1.01

Total assets                                  3,361,262   2,877,530    2,031,193    1,816,604    1,880,060

Long-term debt, less current portion            539,874     549,492      281,276      320,528      393,425

Shareholders' equity                         $1,541,768  $1,328,399   $1,045,241   $  862,068   $  766,340

Number of shares used in per share
  computations:

     Primary                                     73,839      73,064       69,821       68,860       66,140

     Fully diluted                               91,474      85,012       76,265       69,805       66,584




The 1995 results of operations include a $70,360 write-off of in-process
research and development incurred in connection with the acquisition of
software companies.






QUARTERLY/1995
Unaudited, in thousands except per share data                   1ST          2ND          3RD          4TH
----------------------------------------------------------------------------------------------------------
                                                                                    

Net sales                                                 $ 933,146   $1,129,563   $1,184,582   $1,292,279

Gross profit                                                198,145      226,531      230,917      276,316

Income from operations                                       47,480      106,542       96,782      121,818



                                              1





                                                                                     

Net income                                                   22,537       79,269       70,265       88,011

Net income per share:

     Primary                                                    .30         1.07          .97         1.19

     Fully diluted                                              .30          .93          .84         1.02

Price range per share:

     Low                                                    20-1/16       21-7/8        23-5/8          27

     High                                                       $27      $26-3/4       $28-1/4     $42-7/8




The results for the first, third and fourth quarters include in-process
research and development charges of $43,000, $12,780, and $14,580
respectively, in connection with business acquisitions.




QUARTERLY/1994
UNAUDITED, IN THOUSANDS EXCEPT PER SHARE DATA                  1ST           2ND          3RD          4TH
----------------------------------------------------------------------------------------------------------
                                                                                    

Net sales                                                 $ 773,878    $ 815,890    $ 909,270   $1,001,065

Gross profit                                                139,858      154,731      193,352      216,341

Income from operations                                       48,485       60,176       94,097      108,199

Net income                                                   36,068       42,742       67,046       79,254

Net income per share:

     Primary                                                    .51          .59          .91         1.07

     Fully diluted                                              .50          .57          .80          .93

Price range per share:

     Low                                                     15-3/4       16-7/8           22           19

     High                                                       $21          $25       $28-3/8      $26-3/4




STOCK AND DIVIDEND INFORMATION

     The Company's common stock trades on the New York Stock Exchange under
the symbol "SEG". Until December 12, 1994 the Company's stock traded on the
Nasdaq National Market under the symbol "SGAT". The price range per share,
reflected in the above tables, is the highest and lowest sale prices for the
Company's stock as reported by the New York Stock Exchange or Nasdaq, as
applicable, during each quarter. The Company's present policy is to retain its
earnings to finance future growth. The Company has never paid cash dividends
and has no present intention to pay cash dividends. At June 30, 1995 there
were approximately 4,552 shareholders of record.

                                       2



MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   The following discussion should be read in conjunction with the five-year
summary of selected financial data and the Company's consolidated financial
statements and the notes thereto. All references to years represent fiscal
years unless otherwise noted.

   BUSINESS The Company designs, manufactures and markets a broad line of
rigid magnetic disc drives and disc drive components for use in computer
systems ranging from notebook computers and desktop personal computers to
workstations and supercomputers as well as in multimedia applications such as
digital video and video-on-demand.

   The Company sells its products to original equipment manufacturers for
inclusion in their computer systems or subsystems, and to distributors,
resellers and dealers.

   The Company has pursued a strategy of vertical integration and accordingly
designs and manufactures rigid disc drive components including recording
heads, discs, substrates, motors and custom integrated circuits. It also
assembles certain of the key subassemblies for use in its products including
printed circuit board and head stack assemblies.

   The Company has also invested in, and continues to investigate
opportunities to invest in software activities. The Company anticipates that
users of computer systems will increasingly rely upon client/server network
computing environments and believes that as this reliance increases, users
will demand software that more efficiently and securely manages and provides
access to data across computer networked environments. As such, the Company
is broadening its core competencies to include software products to meet
these requirements.

   OPERATIONS The following table sets forth certain items in the Company's
Consolidated Statements of Income as a percentage of net sales for each of
the three years ended June 30, 1995.



                                                  PERCENTAGE OF NET SALES
                                                1995        1994        1993
----------------------------------------------------------------------------
                                                               
Net sales                                       100%        100%        100%

Cost of sales                                    79          80          78
                                                ---         ---         ---
Gross profit                                     21          20          22

Product development                               5           5           5

                                       3


Marketing and administrative                      5           6            7

Amortization of goodwill and other intangibles    1          --           --

In-process research and development               2          --           --

Restructuring costs                              --          --            1
                                                ---         ---          ---

Income from operations                            8           9            9

Other income, net                                 1          --           --
                                                ---         ---          ---

Income before income taxes                        9           9            9

Provision for income taxes                       (3)         (3)          (3)
                                               ----         ----        ----

Net Income                                        6%          6%           6%
                                               ----         ----        ----
                                               ----         ----        ----


   1995 VS 1994 Net sales in 1995 were 30% higher than those reported in
1994. The increase was primarily due to a higher level of unit shipments and
a shift in mix to the Company's higher priced products partially offset by a
continuing decline in the average unit sales prices of the Company's products
as a result of competitive market conditions. The rigid disc drive industry
in which the Company operates is characterized by declining unit sales prices
over the life of a product and the Company believes this characteristic will
continue.

   The increase in gross margin as a percentage of net sales over the prior
year was primarily due to a shift in mix to the Company's newer, higher
capacity disc drives, an increase in units produced resulting in lower
overhead costs per unit and a reduction in material costs partially offset by
a decline in the average unit sales prices of the Company's products as a
result of the competitive market conditions described above.

   Effective January 1, 1995, the European Union ("EU") established a new
General System of Preferences (GSP). Under this revised code certain products
which had been exempt from customs duties under the previous GSP rules,
including hard disc drives imported into the EU from Singapore, again became
subject to such duties (although at a rate lower than Most Favored Nation
[MFN] duties). In addition, during calendar 1995 Singapore is progressively
losing its status as a beneficiary country under GSP. As a result, hard disc
drives produced in Singapore and imported into the EU will realize no
reduction from full MFN customs duties after December 31, 1995. The
imposition of such customs duties could negatively impact revenues or
increase costs and adversely impact gross margins depending upon the extent
to which such duties are absorbed by the Company.

                                       4


   Product development expenses increased by $48,117,000 (28%) compared with
1994, primarily due to increases in salaries and related costs, ongoing
product development expenses of the recently acquired businesses, and costs
incurred in connection with joint development agreements with Sony
Corporation, Japan and Headway Technologies, Inc., as well as an overall
increase in the Company's product development efforts.

   Marketing and administrative expenses increased by $37,117,000 (18%)
compared with 1994, primarily due to ongoing marketing and administrative
expenses of the Company's recently acquired businesses and increases in
salaries and related costs, advertising and promotion and telephone expenses
partially offset by decreases in the provision for bad debts, legal expenses
and travel and entertainment expenses.

   Amortization of goodwill and other intangibles increased by $10,368,000
(81%) compared with 1994, primarily due to additional goodwill and other
intangibles arising from various investments in and acquisitions of
businesses in 1995 (see Acquisitions note to consolidated financial
statements).

   The $70,360,000 charge for in-process research and development in 1995
consists of one time write-offs incurred in connection with the acquisitions
of Palindrome Corporation, Network Computing, Inc., Netlabs Inc., Frye
Computer Systems, Inc. and Creative Interaction Technologies, Inc. The
Company intends to continue its expansion into software and other
complementary businesses and is actively pursuing discussions with companies
that fit with its strategy. As a result, the Company expects that it will
continue to incur charges for in-process research and development as it
acquires businesses.

   Net other income increased by $26,088,000 compared with 1994, primarily
due to higher interest income from higher levels of average invested cash and
higher interest rates, partially offset by higher interest expense from
higher average debt outstanding.

   The provision for income taxes increased from $96,476,000 in 1994 to
$149,257,000 in 1995 primarily due to the increase in pre-tax earnings in
1995 and an increase in the Company's effective tax rate from 30% in 1994 to
36% in 1995. The increase in the effective tax rate was due to the
$70,360,000 write-off of in-process research and development incurred in
connection with the acquisitions of software companies (see Acquisitions note
to consolidated financial statements) that is not deductible for domestic
tax purposes. The Company's Far East manufacturing operations in Singapore,
Thailand and Malaysia operate under various tax holidays which expire in
whole or in part during fiscal years 1997 and 1999. The Company provided
income taxes at the U.S. statutory rate

                                       5


in 1995 on approximately 59% of earnings from foreign subsidiaries compared
with approximately 61% of such earnings in 1994. A substantial portion of the
earnings from the foreign subsidiaries is free of foreign taxes. The net
impact of these tax holidays was to increase net income by approximately
$46,989,000 ($0.51 per share, fully diluted) in 1995, approximately
$29,624,000 ($0.35 per share, fully diluted) in 1994, and approximately
$28,543,000 ($0.37 per share, fully diluted) in 1993.

   The Company's effective tax rate before the write-off of in-process
research and development was 30%. While the Company expects the fiscal year
1996 effective tax rate to approximate 30%, the actual effective tax rate may
be higher than 30% if the Company incurs additional non-deductible charges in
connection with future acquisitions.

   OTHER MATTERS The United States Environmental Protection Agency (EPA)
and/or similar state agencies have identified the Company as a potentially
responsible party with respect to environmental conditions at several
different sites to which hazardous wastes had been shipped or from which they
were released. These sites were acquired by the Company from Ceridian
Corporation ("Ceridian") (formerly Control Data Corporation) in fiscal 1990.
Other parties have also been identified at certain of these sites as
potentially responsible parties. Many of these parties either have shared or
likely will share in the costs associated with the sites. Investigative
and/or remedial activities are ongoing at such sites.

   The Company's portion of the estimated cost of investigation and
remediation of known contamination at the sites to be incurred after June
30, 1995 was approximately $14,900,000. Through June 30, 1995 the Company
had recovered approximately $2,500,000 from Ceridian through its
indemnification and cost sharing agreements with Ceridian and, in addition,
expects to recover approximately $9,800,000 from Ceridian over the next 30
years. After deducting the expected recoveries from Ceridian, the expected
aggregate undiscounted liability was approximately $5,100,000 at June 30,
1995 with payments expected to begin in 1999. The total liability for all
sites recorded by the Company after considering the estimated effects of
inflation, reimbursements by Ceridian and discounting was approximately
$3,000,000 at June 30, 1995.

   The Company believes that the indemnification and cost-sharing agreements
entered into with Ceridian and the reserves that the Company has established
with respect to its future environmental costs are such that, based on

                                       6


present information available to it, future environmental costs related to
currently known contamination will not have a material adverse effect on its
financial condition or results of operations.

   The effect of inflation on operating results has been insignificant. The
Company believes this is due to the absence of any significant inflation
factors in the industry in which the Company participates.

   Gains and losses resulting from translation of foreign financial
statements into U.S. dollars have not had a significant effect on the results
from operations.

   The Company may enter into foreign currency forward exchange and option
contracts to manage exposure related to certain foreign currency commitments,
certain foreign currency denominated balance sheet positions and anticipated
foreign currency denominated expenditures. Gains and losses on contracts to
hedge identifiable foreign currency commitments are deferred and accounted
for as part of the related foreign currency transaction. Gains and losses on
all other forward exchange and option contracts are included in income
currently. Transaction gains and losses have not been material.

   1994 VS 1993 Net sales in 1994 were 15% higher than those reported in
1993. The increase over 1993 was primarily due to a higher level of unit
shipments and a shift in mix to the Company's higher priced products
partially offset by a continuing decline in the average unit sales prices of
the Company's products as a result of competitive market conditions. Although
price erosion for the Company's lower capacity products slowed considerably
during the last half of 1994, price erosion for the Company's higher capacity
products became more severe during this time period, particularly due to more
aggressive marketing of disc drives into the merchant market channels by
large OEM computer manufacturers.

   The decrease in gross margin as a percentage of net sales from the prior
year was primarily due to a decline in the average unit sales prices of the
Company's products as a result of the competitive market conditions described
above, partially offset by a shift in mix to the Company's newer, higher
capacity disc drives, lower unit overhead costs resulting from increased unit
production and reduced material costs.

   Product development expenses increased by $17,902,000 (12%) compared with
1993, primarily due to an increased level of new product introductions and
increased salaries and related costs partially offset by decreased material
costs.

                                       7


   Marketing and administrative expenses decreased by $13,377,000 (6%)
compared with 1993. The decrease in expenses from 1993 was primarily due to a
decrease in the provision for bad debts partially offset by net increases in
other expense categories including legal expenses and salaries and related
costs.

   Net other income increased by $8,220,000 compared with 1993, primarily due
to higher interest income from higher levels of average invested cash
partially offset by higher interest expense from higher average debt
outstanding.

   The provision for income taxes increased from $76,002,000 in 1993 to
$96,476,000 in 1994 primarily due to the increase in pre-tax earnings in 1994
and an increase in the Company's effective tax rate from 28% in 1993 to 30%
in 1994. The Company provided income taxes at the U.S. statutory rate in 1994
on approximately 61% of earnings from foreign subsidiaries compared with
approximately 59% of such earnings in 1993. A substantial portion of the
earnings from the foreign subsidiaries is free of foreign taxes.

   Effective July 3, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). As
permitted by SFAS 109, the Company elected not to restate the financial
statements of any prior years. The change had no effect on pretax income from
continuing operations; however, the cumulative effect of the change increased
net income by $3,000,000 or $.04 per share. The change was not material;
therefore, the Company recorded the cumulative effect of the change as a
reduction of income tax expense for the quarter ended October 1, 1993.

   In August 1993, the President signed the Revenue Reconciliation Act of
1993 which, among other things, increased the U.S. statutory rate to 35% from
34% retroactive to January 1, 1993. Net income was decreased and provision
for income taxes was increased by approximately $2,900,000 for the quarter
ended October 1, 1993 to adjust the net deferred tax liabilities for the
cumulative impact of this rate change.

   OTHER MATTERS The effect of inflation on operating results has been
insignificant. The Company believes this is due to the absence of any
significant inflation factors in the industry in which the Company
participates.

   Gains and losses resulting from translation of foreign financial
statements into U.S. dollars have not had a significant effect on the results
from operations. Transaction gains and losses resulting from hedging
activities have not been material.

                                       8


   LIQUIDITY AND CAPITAL RESOURCES At June 30, 1995, the Company's cash, cash
equivalents and short-term investments totaled $1,246,626,000, a decrease of
$86,916,000 from the prior year-end balances. This decrease was primarily a
result of the Company's additions to property, equipment and leasehold
improvements, its business acquisitions and equity investments and the
repurchase by the Company of 4,457,500 shares of its common stock, largely
offset by cash provided by operating activities and proceeds from the
exercise of stock options and stock sales under the Company's Employee Stock
Purchase Plan. The Company's cash, cash equivalents and short-term
investments are being maintained in short-term liquid investments until
required for other purposes.

   In May 1993 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities" (SFAS 115), which requires a change in the
method used to account for certain investments. The Company adopted SFAS 115
effective July 2, 1994. The cumulative effect as of July 2, 1994 of the
adoption of SFAS 115 did not have a material effect on the Company's financial
condition or results of operations.

   In December 1993, the Company completed an offering of $270,750,000
principal amount of 5% convertible subordinated debentures due 2003. The
proceeds of the offering are being used to further strengthen the Company's
financial position and to provide the Company with additional financial
flexibility to take advantage of business opportunities as they arise. Such
opportunities have thus far included the acquisitions of and investment in,
complementary businesses, products and technologies.

   At June 30, 1995, accounts receivable were $567,747,000, an increase of
$175,516,000 from the July 1, 1994 balance. This increase was primarily a
result of the Company's higher sales volume.

   As of June 30, 1995, the Company had a domestic credit facility consisting
of a $50 million line of credit. There were no borrowings under this line of
credit at June 30, 1995 although approximately $11 million had been utilized
for letters of credit. Additionally, the Company had approximately $33
million of non-domestic lines of credit which can be used for borrowings as
well as letters of credit, bankers' guarantees and overdraft facilities.
Although there were no borrowings under these lines at June 30, 1995,
approximately $3 million had been utilized for bankers' guarantees and
letters of credit. The Company also had approximately $27 million of lines of
credit worldwide which can be used for letters of credit and bankers'
guarantees, but not borrowings. Of the $27 million, approximately $6 million
had been utilized at June 30, 1995.

                                       9


   The Company made investments in property and equipment in 1995 totaling
$364 million. This amount comprised $147 million for manufacturing facilities
and equipment related to the Company's sub-assembly and disc drive final
assembly and test facilities in the U.S. and Far East, $137 million for
manufacturing facilities and equipment for the thin-film head operations in
the U.S., Malaysia and Northern Ireland, $55 million for expansion of the
Company's thin-film media operations in California and $25 million for other
purposes. The Company presently anticipates investments of approximately $950
million in property and equipment in 1996. The Company plans to finance these
investments from existing cash balances and cash flows from operations.

   During the year ended June 30, 1995 the Company acquired 4,457,500 shares
of its common stock for approximately $113 million. The repurchase of these
shares was in connection with a stock repurchase program announced in July
1994 in which up to 7,000,000 shares of the Company's common stock may be
acquired in the open market. The purpose of the stock repurchase program is
to enhance shareholder value. The repurchase program also provides shares to
be issued under the Company's employee stock plans and thereby reduces
dilution from such plans. The Company is uncertain as to whether any further
repurchases of its shares will be made in the foreseeable future.

   The Company anticipates that users of computer systems will increasingly
rely upon client/server network computing environments and believes that as
this reliance increases, users will demand software that more efficiently and
securely manages data across computer networked environments. As such, the
Company is broadening its core competencies to include software products that
meet these requirements. During the year ended June 30, 1995, the Company
acquired Palindrome Corporation, a storage management software company, and
Network Computing, Inc., NetLabs Inc., Frye Computer Systems, Inc., and
Creative Interaction Technologies, Inc., all network management software
companies.

   The Company is also pursuing a strategy to establish itself as a leading
supplier of selected magnetic recording components, including thin-film
heads, to other manufacturers. In line with this strategy, the Company,
during the year ended June 30, 1995, acquired Applied Magnetics Corporation's
tape head subsidiary, a manufacturer of magnetic recording tape heads for
digital data storage.

   The total cost of all businesses acquired during the year ended June 30,
1995, including acquisition costs, was $142,052,000 net of cash acquired. The
Company intends to continue its expansion into software and other

                                      10


complementary businesses and is actively pursuing discussions with companies
that fit with its strategy. The Company plans to finance this expansion
primarily through cash flows from operations and existing cash balances.
However, it is also possible that the Company may utilize funds raised
through equity or debt financing.

   The Company believes that its cash balances together with cash flows from
operations and its borrowing capacity will be sufficient to meet its working
capital needs for the foreseeable future.

                                      11


CONSOLIDATED BALANCE SHEETS


                                                                  JUNE 30,      JULY 1,
IN THOUSANDS EXCEPT SHARE DATA                                        1995         1994
----------------------------------------------------------------------------------------
                                                                        

ASSETS
Cash and cash equivalents                                       $  702,194    $  804,717
Short-term investments                                             544,432       528,825
Accounts receivable                                                567,747       392,231
Inventories                                                        395,838       342,537
Deferred income taxes                                              127,769        95,784
Other current assets                                               106,906        82,351
                                                               -----------    ----------
      Total Current Assets                                       2,444,886     2,246,445
                                                               -----------    ----------
Property, equipment and leasehold improvements, net                615,251       415,038
Goodwill and other intangibles, net                                189,328       126,395
Other assets                                                       111,797        89,652
                                                               -----------    ----------
      Total Assets                                              $3,361,262    $2,877,530
                                                               -----------    ----------
                                                               -----------    ----------

LIABILITIES
Accounts payable                                                $  460,213    $  363,709
Accrued employee compensation                                      112,988        83,843
Accrued expenses                                                   251,696       190,377
Accrued income taxes                                                74,288        64,687
Current portion of long-term debt                                   10,561           168
                                                               -----------    ----------
      Total Current Liabilities                                    909,746       702,784
                                                               -----------    ----------
Deferred income taxes                                              244,731       218,801
Other liabilities                                                  125,143        78,054
Long-term debt, less current portion                               539,874       549,492
                                                               -----------    ----------
      Total Liabilities                                          1,819,494     1,549,131
                                                               -----------    ----------
Commitments and Contingencies

SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value--1,000,000 shares
   authorized; none issued or outstanding                               --            --
Common stock, $.01 par value -- 200,000,000 shares authorized;
   shares issued -- 72,846,505 in 1995 and
   72,832,351 in 1994                                                  729           728
Additional paid-in capital                                         393,849       373,296
Retained earnings                                                1,171,067       955,419
Treasury common stock at cost, 856,234 shares in 1995              (22,839)           --
Foreign currency translation adjustment                             (1,038)       (1,044)
                                                               -----------    ----------
      Total Shareholders' Equity                                 1,541,768     1,328,399
                                                              -----------    ----------

      Total Liabilities and Shareholders' Equity                $3,361,262    $2,877,530
                                                               -----------    ----------
                                                               -----------    ----------


See notes to consolidated financial statements



                                       12


CONSOLIDATED STATEMENTS OF INCOME


                                                        JUNE 30,      JULY 1,      JULY 2,
FOR THE YEARS ENDED, IN THOUSANDS EXCEPT PER SHARE DATA     1995         1994         1993
------------------------------------------------------------------------------------------
                                                                       
Net sales                                             $4,539,570   $3,500,103   $3,043,604

Cost of sales                                          3,607,661    2,795,821    2,370,676

Product development                                      220,024      171,907      154,005

Marketing and administrative                             245,811      208,694      222,071

Amortization of goodwill and other intangibles            23,092       12,724       12,825

In-process research and development                       70,360           --           --

Restructuring costs                                           --           --       15,000
                                                      ----------   ----------   ----------

     Total Operating Expenses                          4,166,948    3,189,146    2,774,577
                                                      ----------   ----------   ----------

     Income from Operations                              372,622      310,957      269,027

Interest income                                           65,560       37,191       23,659

Interest expense                                         (32,966)     (26,339)     (23,511)

Other                                                      4,123         (223)       2,261
                                                      ----------   ----------   ----------

     Other Income, net                                    36,717       10,629        2,409

Income before income taxes                               409,339      321,586      271,436

Provision for income taxes                              (149,257)     (96,476)     (76,002)
                                                      ----------   ----------   ----------

     Net Income                                       $  260,082   $  225,110   $  195,434
                                                      ----------   ----------   ----------
                                                      ----------   ----------   ----------

Net Income per Share:

     Primary                                          $     3.52   $     3.08   $     2.80

     Fully diluted                                          3.06         2.83         2.71

Number of shares used in per share computations:

     Primary                                              73,839       73,064       69,821

     Fully Diluted                                        91,474       85,012       76,265


See notes to consolidated financial statements



                                          13



CONSOLIDATED STATEMENTS OF CASH FLOWS




                                                        JUNE 30,        JULY 1,       JULY 2,
FOR THE YEARS ENDED, IN THOUSANDS                           1995           1994          1993
---------------------------------------------------------------------------------------------
                                                                            
OPERATING ACTIVITIES
Net Income                                              $260,082       $225,110      $195,434
Adjustments to reconcile net income
to net cash from operating activities:
   Depreciation and amortization                         215,358        173,998       188,734
   Deferred income taxes                                 (18,259)        33,308        25,566
   In-process research and development                    70,360             --            --
   Other                                                     585          2,607         9,027
   Changes in operating assets and liabilities:
      Accounts receivable                               (168,954)       (34,550)       43,767
      Inventories                                        (90,816)        37,542      (114,003)
      Accounts payable                                    87,213        109,411        11,368
      Accrued income taxes                                30,154         31,084        21,202
      Other assets and liabilities                       120,993         41,181         7,635
                                                       ---------      ---------      --------
   Net cash provided by operating activities             506,716        619,691       388,730

INVESTING ACTIVITIES
Acquisition of property, equipment and
leasehold improvements, net                             (353,431)      (197,684)     (173,570)
Purchases of short-term investments                   (1,292,697)      (870,867)     (335,566)
Maturities and sales of short-term investments         1,279,475        541,782       203,414
Acquisitions of businesses, net of cash acquired        (142,052)            --           --
Equity Investments                                       (29,811)            --           --
Other                                                      1,296        (17,619)      (32,550)
                                                       ---------      ---------      --------
   Net cash used in investing activities                (537,220)      (544,388)     (338,272)

FINANCING ACTIVITIES
Issuance of long-term debt                                   --         270,750           --
Repayment of long-term debt                               (1,466)        (3,931)      (40,204)
Sale of common stock                                      45,124         37,836        20,153
Purchase of treasury stock                              (113,409)            --       (36,602)
                                                       ---------      ---------      --------
   Net cash provided by (used in) financing activities   (69,751)       304,655       (56,653)
Effect of exchange rate changes on
  cash and cash equivalents                               (2,268)        (1,335)           (7)
                                                       ---------      ---------      --------
   Increase (decrease) in cash and cash equivalents     (102,523)       378,623        (6,202)
Cash and cash equivalents at the beginning of the year   804,717        426,094       432,296
                                                       ---------      ---------      --------
Cash and cash equivalents at the end of the year        $702,194       $804,717      $426,094
                                                       ---------      ---------      --------
                                                       ---------      ---------      --------

See notes to consolidated financial statements


                                            14


CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY




FOR THE YEARS ENDED                                                                       FOREIGN
JUNE 30, 1995, JULY 1,          COMMON STOCK     ADDITIONAL   TREASURY                    CURRENCY
1994 AND JULY 2,               --------------     PAID-IN      COMMON     DEFERRED       TRANSLATION   RETAINED
1993, IN THOUSANDS             SHARES   AMOUNT    CAPITAL       STOCK    COMPENSATION    ADJUSTMENT    EARNINGS      TOTAL
----------------------------------------------------------------------------------------------------------------------------
                                                                                            
Balance at July 1, 1992        68,288    $682     $301,894      $(793)     $(2,303)       $1,316       $561,272     $862,068

Sale of stock                   2,372      24       20,129                                                            20,153

Purchase of treasury
stock at cost                                                 (36,602)                                               (36,602)

Retirement of
treasury stock                 (2,505)    (25)     (10,576)    37,395                                   (26,794)         ---

Amortization of deferred
compensation                                                                 1,843                                     1,843

Income tax benefit from
stock options exercised                              4,122                                                             4,122

Foreign currency
translation adjustment                                                                    (1,777)                     (1,777)

Net Income                                                                                              195,434      195,434
                              -------     -----   ---------  ---------  ----------       --------    ----------   ----------
Balance at July 2, 1993        68,155     681      315,569         --         (460)         (461)       729,912    1,045,241

Sale of stock                   3,940      40       37,796                                                            37,836

Amortization of deferred
compensation                                                                   460                                       460

Income tax benefits, primarily
from stock options exercised                        19,938                                                            19,938

Merger with Crystal
Computer Services, Inc.           737       7           (7)                                                 397          397

Foreign currency
translation adjustment                                                                      (583)                       (583)

Net Income                                                                                              225,110      225,110
                              -------     -----   ---------  ---------  ----------       --------    ----------   ----------
Balance at July 1, 1994        72,832     728      373,296         --           --        (1,044)       955,419    1,328,399

Sale of stock                      15       1                                                                              1

Purchase of treasury
stock at cost                                                (113,409)                                              (113,409)

Issuance of treasury stock                                     90,570                                   (45,447)      45,123

Income tax benefit
from stock options exercised                        20,553                                                            20,553

Foreign currency
translation adjustment                                                                         6                           6

Unrealized gain on
marketable securities                                                                                     1,013        1,013

Net Income                                                                                              260,082      260,082
                              -------     -----   ---------  ---------  ----------       --------    ----------   ----------
Balance at June 30, 1995       72,847     $729     $393,849   $(22,839)  $      --       $(1,038)    $1,171,067   $1,541,768
                              -------     -----   ---------  ---------  ----------       --------    ----------   ----------
                              -------     -----   ---------  ---------  ----------       --------    ----------   ----------

See notes to consolidated financial statements


                                        15



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   BASIS OF CONSOLIDATION The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries after eliminations.

   The Company operates and reports financial results on a fiscal year of 52
or 53 weeks ending on the Friday closest to June 30. Accordingly, fiscal
1995 ended on June 30, 1995, fiscal 1994 ended on July 1, 1994 and
fiscal 1993 ended on July 2, 1993. All fiscal years comprised 52 weeks.
All references to years in these notes to consolidated financial statements
represent fiscal years unless otherwise noted.

   FOREIGN CURRENCY TRANSLATION The U.S. dollar is the functional currency
for most of the Company's foreign operations. Gains and losses on the
translation into U.S. dollars of amounts denominated in foreign currencies
are included in net income for those operations whose functional currency is
the U.S. dollar and as a separate component of shareholders' equity for those
operations whose functional currency is the local currency.

   The Company may enter into foreign currency forward exchange and option
contracts to manage exposure related to certain foreign currency commitments,
certain foreign currency denominated balance sheet positions and anticipated
foreign currency denominated expenditures. Gains and losses on contracts to
hedge identifiable foreign currency commitments are deferred and accounted
for as part of the related foreign currency transaction. Gains and losses on
all other forward exchange and option contracts are included in income
currently. Transaction gains and losses have not been material.

   REVENUE RECOGNITION AND PRODUCT WARRANTY Revenue from sales of products is
generally recognized upon shipment to customers. The Company warrants its
products against defects in design, materials and workmanship generally for
three to five years depending upon the capacity category of the disc drive,
with the higher capacity products being warranted for the longer periods. A
provision for estimated future costs relating to warranty expense is recorded
when products are shipped.

   INVENTORY Inventories are valued at the lower of standard cost (which
approximates actual cost using the first-in, first-out method) or market.

   PROPERTY, EQUIPMENT, AND LEASEHOLD IMPROVEMENTS Land, equipment, buildings
and leasehold improvements are stated at cost. Equipment and buildings are
depreciated using the straight-line method over the

                                      16


estimated useful lives of the assets. Leasehold improvements are amortized
using the straight-line method over the shorter of the estimated life of the
asset or the remaining term of the lease.

   INCOME TAXES The Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS 109), effective
July 3, 1993. Under SFAS 109, deferred tax assets and liabilities are
determined based on differences between the financial reporting and tax basis
of assets and liabilities and are measured by applying enacted tax rates and
laws to taxable years in which such differences are expected to reverse. In
1993, income tax expense was determined using Accounting Principles Board
Opinion No. 11 (APB 11).

   NET INCOME PER SHARE Primary net income per share is based on the weighted
average number of shares of common stock and common stock equivalents
outstanding during the year. Common stock equivalents consist of stock
options. Fully diluted net income per share further assumes the conversion of
the Company's 5% and 6-3/4% convertible subordinated debentures for the
period they were outstanding.

   CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS The Company considers
all highly liquid investments with a remaining maturity of 90 days or less at
the time of purchase to be cash equivalents. Cash equivalents are carried at
cost which approximates fair value. The Company's short-term investments
comprise readily marketable debt securities with remaining maturities of more
than 90 days at the time of purchase. Where the remaining maturity is more
than one year the securities are classified as short-term investments as the
Company's intention is to convert them into cash within one year.

   Effective July 2, 1994, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in
Debt and Equity Securities". In accordance with the Statement, prior period
financial statements have not been restated to reflect the change in
accounting principle. The cumulative effect as of July 2, 1994 of the
adoption of SFAS No. 115 did not have a material effect on the Company's
financial condition or results of operations.

   The Company has classified its entire investment portfolio as
available-for-sale. Available-for-sale securities are stated at fair value
with unrealized gains and losses included in shareholders' equity. The
amortized cost of debt securities is adjusted for amortization of premiums
and accretion of discounts to maturity. Such amortization is included in
interest income. Realized gains and losses are included in other income
(expense). The cost of securities sold is based on the specific
identification method.

                                      17


   CONCENTRATION OF CREDIT RISK The Company designs, manufactures and markets
a line of rigid magnetic disc drives for sale throughout the world to
original equipment manufacturers, distributors, resellers and dealers.
Financial instruments which potentially subject the Company to concentrations
of credit risk are primarily accounts receivable, cash equivalents and
short-term investments. The Company performs ongoing credit evaluations of
its customers' financial condition and, generally, requires no collateral
from its customers. The allowance for non-collection of accounts receivable
is based upon the expected collectibility of all accounts receivable. The
Company places its cash equivalents and short-term investments in investment
grade, short-term debt instruments and limits the amount of credit exposure
to any one commercial issuer.

   GOODWILL AND OTHER INTANGIBLES Goodwill represents the excess of the
purchase price of acquired companies over the estimated fair value of the
tangible and intangible net assets acquired. Goodwill and other intangibles
are being amortized on a straight-line basis over periods ranging from eight
months to fifteen years. Accumulated amortization was $82,265,000 and
$59,421,000 as of June 30, 1995 and July 1, 1994, respectively.

FINANCIAL INSTRUMENTS

   The following is a summary of available-for-sale securities at June 30,
1995:




                                                          Gross         Gross
                                           Amortized    Unrealized    Unrealized
                                              Cost         Gain          Loss       Fair Value
In thousands
----------------------------------------------------------------------------------------------
                                                                        
Corporate Bonds                              $374,999         $523       $(58)        $375,464

U.S. Government Obligations                   201,482          615       (116)         201,981

Commercial Paper                              218,734           45        (10)         218,769

Money Market Instruments                      112,151          515         --          112,666

Municipal Bonds                                72,200           46         --           72,246

Taxable Auction Rate Preferred Stock          108,099           --       (546)         107,553
                                           ----------      -------       -----      ----------

Total                                      $1,087,665       $1,744       $(730)     $1,088,679
                                           ----------      -------       -----      ----------
                                           ----------      -------       -----      ----------

Included in short-term investments                                                    $544,432

Included in cash and cash equivalents                                                  544,247
                                                                                    ----------
Total                                                                               $1,088,679
                                                                                    ----------
                                                                                    ----------

                                      18


   The gross realized gains and losses on the sale of available-for-sale
securities were immaterial for the year ended June 30, 1995.

   The fair value of the Company's investment in debt securities at June 30,
1995, by contractual maturity, is as follows (in thousands):




                                                     
Due in less than 1 year                                $680,214

Due in 1 to 2-1/2 years                                 188,246
                                                       --------

Total                                                  $868,460
                                                       --------
                                                       --------


   FAIR VALUE DISCLOSURES The carrying value of cash and cash equivalents
approximates fair value. The fair values of short-term investments,
convertible subordinated debentures (See Long-Term Debt and Lines of Credit
footnote) and foreign currency forward exchange and option contracts are
estimated based on quoted market prices. The fair value of the Company's 7.7%
note payable approximated its carrying value.

   The carrying values and fair values of the Company's financial instruments
are as follows:




In thousands                                                  June 30, 1995             July 1, 1994
-----------------------------------------------------------------------------------------------------------
                                                                                     
                                                          Carrying     Estimated    Carrying     Estimated
                                                           amount      fair value    amount      fair value
-----------------------------------------------------------------------------------------------------------

Cash and cash equivalents                                  $702,194     $702,194     $804,717     $804,717

Short-term investments                                      544,432      544,432      528,825      528,825

5% convertible subordinated debentures                      270,750      422,370      270,750      249,090

6 3/4% convertible subordinated debentures                  266,838      280,180      266,838      224,811

7.7% note payable                                            10,000       10,000       10,000       10,000

Foreign currency forward exchange and option contracts           --       (4,142)          --         (946)



    DERIVATIVE FINANCIAL INSTRUMENTS The Company may enter into foreign
currency forward exchange and option contracts to manage exposure related to
certain foreign currency commitments, certain foreign currency denominated
balance sheet positions and anticipated foreign currency denominated
expenditures. The Company does not enter into derivative financial
instruments for trading purposes. At June 30, 1995,

                                      19


the Company had forward exchange contracts totaling $114,000,000 maturing
over the next twelve months for the purchase of Singapore dollars in support
of the expansion and modernization of its Singapore facility. In addition, at
June 30, 1995, the Company had approximately $60,000,000 of forward contracts
for the purchase of Malaysian Ringets, $56,000,000 of forward contracts for
the purchase of Singapore dollars, and had written option contracts amounting
to $140,000,000 for the purchase of Singapore dollars, all to be utilized for
ongoing operating requirements. The Malaysian forward contracts mature over
the next six months, the Singapore forward contracts mature over the next
three months, and the written option contracts for Singapore dollars mature
over the next fifteen months. The unrealized deferred loss on the Company's
foreign exchange contracts as of June 30, 1995, was not material.

     While the contract or notional amounts of the Company's forward exchange
and option contracts provide one measure of the volume of these transactions,
they do not represent the amount of the Company's exposure to credit risk.
The amounts potentially subject to credit risk (arising from the possible
inability of counterparties to meet the terms of their contracts) are generally
limited to the amounts, if any, by which the counterparties' obligations exceed
the obligations of the Company. The Company controls credit risk through credit
approvals, limits and monitoring procedures. Credit rating criteria for
off-balance-sheet transactions are similar to those for investments.

ACCOUNTS RECEIVABLE

   Accounts receivable are summarized below:




In thousands                                   1995                1994
-------------------------------------------------------------------------
                                                             
Accounts receivable                          $621,146            $435,061

Less allowance for non-collection              53,399              42,830
                                             --------            --------

                                             $567,747             $392,231
                                             --------            ---------
                                             --------            ---------


                                      20


INVENTORIES

   Inventories are summarized below:




In thousands                                    1995                 1994
------------------------------------------------------------------------------
                                                             
Components                                   $203,036              $188,477

Work-in-process                                65,124                56,735

Finished goods                                127,678                97,325
                                             --------              --------

                                             $395,838              $342,537
                                             --------              --------
                                             --------              --------



PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

     Property, equipment and leasehold improvements consisted of the following:




In thousands                                            1995                     1994
-----------------------------------------------------------------------------------------
                                                                         
Land                                                   $9,148                    $8,278

Equipment                                             956,808                   742,215

Building and Leasehold Improvements                   235,673                   187,155

Construction in progress                              100,389                    33,205
                                                    ----------                  ---------
                                                    1,302,018                    970,853

Less accumulated depreciation and amortization        686,767                    555,815
                                                    ----------                  ---------

                                                     $615,251                    $415,038
                                                    ----------                   ---------
                                                    ----------                   ---------



   Equipment and leasehold improvements include assets under capitalized
leases. Lease amortization is included in depreciation expense.

   In 1993, the Company reduced the number of years over which certain
equipment is depreciated, resulting in additional depreciation expense of
approximately $15,000,000.

   Depreciation expense was $163,771,000, $138,208,000 and $155,018,000 in
1995, 1994 and 1993, respectively.

ACCRUED WARRANTY

   Accrued warranty of $103,246,000 and $66,105,000 is included in accrued
expenses in 1995 and 1994, respectively, and accrued warranty of $116,833,000
and $72,515,000 is included in other liabilities in 1995 and 1994,
respectively.

                                      21


LONG-TERM DEBT AND LINES OF CREDIT

   Long-term debt consisted of the following:




In thousands                                                                        1995              1994
-------------------------------------------------------------------------------------------------------------
                                                                                              
6-3/4% convertible subordinated debentures, due 2012                              $266,838           $266,838

5% convertible subordinated debentures, due 2003                                   270,750            270,750

7.7% note payable to Ceridian Corporation, due October 1995                         10,000             10,000

Capitalized lease obligations with interest at 14% to 19.25% collateralized
 by certain manufacturing equipment and buildings                                    2,847              2,072
                                                                                --------           --------
                                                                                   550,435            549,660
Less: Current portion                                                               10,561                168
                                                                                  --------           --------
                                                                                  $539,874           $549,492
                                                                                  --------           --------
                                                                                  --------           --------



   At June 30, 1995 future minimum principal payments on long-term debt and
capitalized lease obligations were as follows:




In thousands
---------------------------------------------------------------------------
                                                                 
1996                                                                $10,561

1997                                                                    253

1998                                                                    103

1999                                                                     27

2000                                                                      3

After 2000                                                          539,488
                                                                   --------

                                                                   $550,435
                                                                   --------
                                                                   --------



   The Company's 6-3/4% convertible subordinated debentures due 2012 are
convertible into 6,278,541 shares of common stock at $42.50 per share at any
time prior to maturity. Sinking fund payments begin in 1998 in an amount
sufficient to retire annually 5% of the aggregate principal amount of
debentures issued, calculated to retire 70% of the debentures prior to
maturity.

   The Company's 5% convertible subordinated debentures due 2003 are
convertible into 10,314,286 shares of common stock at $26.25 per share at any
time prior to maturity. Subsequent to November 2, 1996 the debentures are
redeemable at the option of the Company, in whole or in part, initially at
103.5% and thereafter at prices

                                      22


declining to 100% at maturity, together with accrued interest. These
debentures were issued in an offering not registered or required to be
registered under the U.S. Securities Act of 1933, as amended and therefore
were offered only to "qualified institutional buyers" and "accredited
investors" as defined by the applicable Securities and Exchange Commission
regulations. These debentures are traded in the Private Offerings, Resales
and Trading through Automated Linkages ("PORTAL") Market. In 1994 holders
of the 5% convertible subordinated debentures due 2003 exercised their
registration rights with respect to the shares of common stock of the Company
into which such debentures are convertible. In 1995 the Company filed a
registration statement under the Securities Act of 1933, as amended, to
register such shares of common stock.

   At June 30, 1995, the fair value of the Company's 6-3/4% convertible
subordinated debentures, based on the New York Stock Exchange quoted market
price, was approximately $280,180,000. At June 30, 1995, the fair value of the
Company's 5% convertible subordinated debentures was approximately
$422,370,000 based on the quoted market price from brokers of these
securities. The aggregate fair value of the Company's other long-term debt
approximated its carrying value at June 30, 1995.

   The Company maintains an unsecured domestic credit facility consisting of
a $50 million line of credit under a credit agreement with four banks which
expires in June 1997. Borrowings under this agreement bear interest, as
defined in the agreement, at (1) the higher of the agent bank's prime rate
(9% at June 30, 1995) or the federal funds rate or (2) at the option of the
Company, an adjusted certificate of deposit rate or the London Interbank
Offered Rate. The credit agreement provides for a commitment fee and
restrictions on dividend payments and includes certain financial covenants.

   Through its overseas subsidiaries, the Company has short-term credit and
overdraft borrowing facilities totaling approximately $33 million.
Additionally, the Company had approximately $27 million in lines of credit
worldwide which can be used for letters of credit and banker's guarantees,
but not borrowings. Any borrowings or other utilization under these
facilities are guaranteed by the parent company. For virtually all of the
borrowing lines, interest is at the banks' prime rates.

   While there were no borrowings under these lines of credit at June 30,
1995, portions of the credit lines had been utilized to cover outstanding
letters of credit and bank guarantees as required in various supplier
agreements,

                                      23


and for forward purchases and sales of foreign currencies. As of June 30,
1995, the Company had available to it combined unused borrowing capacity of
$69 million under its lines of credit worldwide.

                                      24


STOCK OPTION AND STOCK PURCHASE PLANS

     Options granted under the Company's stock option plans are granted at
fair market value, expire ten years from the date of the grant and generally
vest in four equal annual installments, commencing one year from the date of
the grant.

     Following is a summary of stock option activity for the three years
ended June 30, 1995:



                                             Options Outstanding
                                         -------------------------------------------
                              Options                  Aggregate
                             Available                  Exercise          Price
                             For Grant     Number         Price         Per Share
------------------------------------------------------------------------------------
                                                          
Balance July 1, 1992         2,573,111    10,810,992   $105,506,342   $5.75-$15.875

Granted                     (1,399,000)    1,399,000     22,064,156    12.25-20.625

Exercised                       --        (1,880,693)   (14,090,808)    5.75-15.375

Expired                       (258,523)        --           --              --

Canceled                       500,298      (500,298)    (5,489,666)     5.75-18.75
                            ----------    ----------    -----------    ------------

Balance July 2, 1993         1,415,886     9,829,001    107,990,024     5.75-20.625

Additional Authorizations -
1991 ISO Plan                6,000,000         --           --              --

Granted                     (2,882,972)    2,882,972     62,937,159     16.00-27.75

Exercised                       --        (3,396,187)   (30,543,475)    5.75-19.625

Expired                       (104,372)        --           --              --

Canceled                       274,837      (274,837)    (3,847,168)     5.75-27.75
                            ----------    ----------    -----------    ------------
Balance July 1, 1994         4,703,379     9,040,949    136,536,540      5.75-27.75

Granted                     (2,422,611)    2,422,611     64,639,997    21.875-33.25

Exercised                       --        (3,208,048)   (36,709,183)     5.75-27.75

Expired                        (96,591)        --            --              --

Canceled                       358,953      (358,953)    (6,751,806)     7.50-27.75
                            ----------    ----------    -----------    ------------
Balance June 30, 1995        2,543,130     7,896,559   $157,715,548    $5.75-$33.25
                            ----------    ----------    -----------    ------------
                            ----------    ----------    -----------    ------------

                                    25


     At June 30, 1995, options to purchase 1,923,533 shares of common
stock were exercisable.

     In 1990, the Company established the Executive Stock Program and the
grant of rights to purchase 500,000 shares of the Company's common stock at
$.01 per share to each of three officers and directors of the Company.
Subsequently, two of those officers/directors resigned, one in 1991 and the
other in 1992. As a result of those resignations the Company repurchased
750,000 of the shares at their original purchase price, canceled the shares,
and reversed the associated amortization of deferred compensation. The
difference between the fair market value of the shares at the date of grant
and the exercise price was recorded as deferred compensation in the financial
statements and was charged to operations over a four year period. The amount
charged to operations was $460,000, and $1,843,000 in 1994 and 1993,
respectively.

     The Company also maintains an Employee Stock Purchase Plan. A total of
6,800,000 shares of common stock have been authorized for issuance under the
Purchase Plan. The Purchase Plan permits eligible employees who have
completed thirty days of employment prior to the inception of the offering
period to purchase common stock through payroll deductions at the lower of
85% of the fair market value of the common stock at the beginning or at the
end of each six-month offering period. Under the plan, 422,699, 558,988 and
482,698 shares of common stock were issued in 1995, 1994 and 1993,
respectively.

     Common stock reserved for future issuance under the Company's Stock
Option and Stock Purchase Plans aggregated 12,806,384 shares at June 30,
1995.

     In July 1995 the Board of Directors approved an amendment to the
1991 Incentive Stock Option plan to increase the number of shares of common
stock reserved for issuance thereunder by 6,000,000, subject to shareholder
approval at the 1995 Annual Meeting of Shareholders.

EMPLOYEE PROFIT SHARING AND EXECUTIVE BONUS PLANS

     The Company allocates a certain percentage of quarterly pre-tax profits
to its Employee Profit Sharing Plan which is currently distributed to
employees, excluding officers, employed for the full quarter. The Company
also allocates a certain percentage of quarterly pre-tax profits to its
Executive Bonus Plan. Distributions to corporate officers under this plan are
subject to the discretion of the Board of Directors. Charges to operations
for these Plans during 1995, 1994 and 1993 were $54,130,000, $34,487,000, and
$26,155,000, respectively.

                                     26


INCOME TAXES

The provision for income taxes consisted of the following:




In thousands                             1995           1994              1993
--------------------------------------------------------------------------------
                                                                        Deferred
                                          Liability Method               Method
                                          ----------------              --------
                                                               
Federal

     Current                          $129,203        $40,280            $35,687

     Deferred                          (16,020)        34,351             26,077
                                      --------        -------            -------
                                       113,183         74,631             61,764
                                      --------        -------            -------
State

     Current                            27,280         13,907             13,526

     Deferred                           (8,762)          (894)            (2,669)
                                      --------        -------            -------
                                        18,518         13,013             10,857
                                      --------        -------            -------
Foreign

     Current                            11,033          8,981              1,223

     Deferred                            6,523           (149)             2,158
                                      --------        -------            -------
                                        17,556          8,832              3,381
                                      --------        -------            -------

Provision for Income Taxes            $149,257        $96,476            $76,002
                                      --------        -------            -------
                                      --------        -------            -------


     The income tax benefit related to the exercise of stock options reduces
taxes currently payable and is credited to additional paid-in capital. Such
amounts approximated $20,553,000, $19,938,000 and $4,122,000 for 1995, 1994
and 1993, respectively.

                                     27


     Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.
The significant components of the Company's deferred tax assets and
liabilities were as follows:




In thousands                                   June 30, 1995         July 1, 1994
------------------------------------------------------------------------------------
                                                               
DEFERRED TAX ASSETS

Receivable reserves                              $  17,876             $  15,268

Inventory valuation accounts                        13,496                 9,017

Accrued compensation and benefits                   21,787                14,382

Warranty reserves                                   85,214                54,132

Foreign net operating loss carryforwards            13,208                11,129

Other reserves and accruals                         19,764                25,903

Accrued taxes                                       10,114                 5,787

Other                                               10,181                 6,325
                                                 ---------             ---------
     Total Deferred Tax Assets                     191,640               141,943

Valuation allowance                                (19,139)              (17,522)
                                                 ---------             ---------
     Net Deferred Tax Assets                     $ 172,501             $ 124,421
                                                 ---------             ---------
DEFERRED TAX LIABILITIES

Unremitted income of foreign subsidiaries        $(245,206)            $(199,766)

Acquisition related items                          (31,248)              (25,099)

Property reserves                                   (3,494)              (12,242)

Other                                               (9,515)              (10,331)
                                                 ---------             ---------
     Total Deferred Tax Liabilities               (289,463)             (247,438)
                                                 ---------             ---------
     Net Deferred Tax Liabilities                $(116,962)            $(123,017)
                                                 ---------             ---------
                                                 ---------             ---------


                                     28


     The valuation allowance has been provided for deferred tax assets
related to foreign net operating loss carryforwards and future tax benefits
related to the merger with Crystal Computer Services, Inc. not realized
as of the combination date. The valuation allowance increased by $1,617,000
and $9,666,000 in 1995 and 1994, respectively.

     The differences between the provision for income taxes at the U.S.
statutory rate and the effective rate are summarized as follows:




In thousands                             1995           1994              1993
--------------------------------------------------------------------------------
                                                                        Deferred
                                          Liability Method               Method
                                          ----------------              --------
                                                               

Provision at U.S. statutory rate      $143,269        $112,555          $92,288

State income taxes net of federal
income tax benefit                      12,037           8,458            7,166

Benefit from net earnings of foreign
subsidiaries considered to be
permanently invested in non-U.S.
operations                             (52,668)        (36,021)         (31,244)

Foreign income taxes                    14,529           5,539            2,431

Write-off of in-process research
and development                         24,626           --                 --

Other                                    7,464           5,945            5,361
                                      --------         -------          -------
                                      $149,257         $96,476          $76,002
                                      --------         -------          -------
                                      --------         -------          -------

                                     29


     The Company's Far East manufacturing operations in Singapore, Thailand
and Malaysia operate under various tax holidays which expire in whole or in
part during fiscal years 1997 and 1999. Certain tax holidays may be extended
if certain conditions are met. The net impact of these tax holidays was to
increase net income by approximately $46,989,000 ($0.51 per share, fully
diluted) in 1995, approximately $29,624,000 ($0.35 per share, fully diluted)
in 1994, and approximately $28,543,000 ($0.37 per share, fully diluted) in
1993. Cumulative undistributed earnings of the Company's Far East
subsidiaries for which no income taxes have been provided aggregated
approximately $751,489,000 at June 30, 1995. These earnings are
considered to be permanently invested in non-U.S. operations. Additional
taxes of approximately $263,021,000 would have to be provided if these
earnings were repatriated to the U.S.

     The United States Tax Court's decision concerning the federal audit for
the fiscal years 1983 through 1987 became final during fiscal 1995. The
Company has paid substantially all of the related tax and interest for this
period. The result of the Tax Court's decision did not have a material adverse
effect on the Company's financial condition or results of operations.


     In 1994, the Internal Revenue Service ("IRS") concluded a field audit of
the Company's income tax returns for the fiscal years 1988 through 1990 and
issued to the Company a "Notice of Deficiency" (the "Notice") for those fiscal
years. The majority of the proposed adjustments to income in those fiscal
years related to the allocation of income between the Company and its foreign
subsidiaries. The proposed adjustments to income and tax credits in the
Notice resulted in proposed tax deficiencies of approximately $66,000,000
plus penalties and interest. The proposed income adjustments would also
eliminate tax net operating loss and tax credit carryovers that have been
used to offset taxable income and tax liabilities in other fiscal years. The
impact on tax net operating losses and tax credit carryovers from the
adjustments proposed in the Notice would result in additional taxes of
approximately $22,000,000 for the three years ended July 2, 1993 plus
interest. The Company on June 7, 1994 filed a Petition in the United States
Tax Court entitled Seagate Technology, Inc. and Consolidated Subsidiaries v.
Commissioner of Internal Revenue, Docket No. 9535-94, contesting these
proposed deficiencies and related penalties. The IRS filed its Answer on
August 4, 1994. The Company believes that the likely outcome of this matter
will not have a material adverse effect on the Company's financial condition
or results of operations.

                                     30


     The Company's federal income tax returns for the fiscal years 1991, 1992
and 1993 are presently under examination by the IRS. Certain foreign and
state tax returns for fiscal years 1990 through 1994 are also under
examination by taxing authorities. The Company believes that adequate amounts
of tax have been provided for any final assessments which may result from
these examinations.

RESTRUCTURING COSTS

     In 1993, restructuring costs in the amount of $15,000,000 were provided
for a consolidation of the Company's worldwide manufacturing and repair
activities. This was a result of the Company's continuing aggressive pursuit
of product cost reductions, particularly through improvements in its
manufacturing processes and more efficient utilization of its most
cost-effective manufacturing sites.

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

     The Company operates principally in a single line of business: The
design, development, manufacture and sale of a broad line of rigid magnetic
disc drives and disc drive components for use in computer systems ranging
from notebook computers and desktop personal computers to workstations and
supercomputers as well as in multimedia applications such as digital video
and video-on-demand.

     The following tables summarize the Company's operations in different
geographic areas:



                                                                 Adjustments
                                          United        Far          and
Year Ended June 30, 1995, in thousands    States        East     Eliminations     Consolidated
----------------------------------------------------------------------------------------------
                                                                      
Sales to unaffiliated customers         $2,671,730  $1,867,840   $     --         $4,539,570

Transfers between geographic areas         779,561   2,281,806    (3,061,367)          --
                                        ----------  ----------   -----------      ----------
Total net sales                         $3,451,291  $4,149,646   $(3,061,367)     $4,539,570
                                        ----------  ----------   -----------      ----------
                                        ----------  ----------   -----------      ----------
Income from operations                  $   47,114  $  325,508   $     --         $  372,622

Other income, net                            8,129      28,588         --             36,717
                                        ----------  ----------   -----------      ----------
Income before income taxes              $   55,243  $  354,096   $     --         $  409,339
                                        ----------  ----------   -----------      ----------
                                        ----------  ----------   -----------      ----------
Identifiable Assets                     $1,922,457  $1,438,805   $     --         $3,361,262
                                        ----------  ----------   -----------      ----------
                                        ----------  ----------   -----------      ----------


                                     31




                                                                 Adjustments
                                          United        Far          and
Year Ended July 1, 1994, in thousands     States        East     Eliminations     Consolidated
----------------------------------------------------------------------------------------------
                                                                      
Sales to unaffiliated customers         $1,826,624  $1,673,479   $     --         $3,500,103

Transfers between geographic areas         601,512   1,342,269    (1,943,781)         --
                                        ----------  ----------   -----------      ----------
Total net sales                         $2,428,136  $3,015,748   $(1,943,781)     $3,500,103
                                        ----------  ----------   -----------      ----------
                                        ----------  ----------   -----------      ----------
Income from operations                  $   50,922  $  260,035   $     --         $  310,957

Other income, net                           (7,587)     18,216         --             10,629
                                        ----------  ----------   -----------      ----------
Income before income taxes              $   43,335  $ $278,251   $     --         $  321,586
                                        ----------  ----------   -----------      ----------
                                        ----------  ----------   -----------      ----------
Identifiable Assets                     $1,694,770  $1,182,760   $     --         $2,877,530
                                        ----------  ----------   -----------      ----------
                                        ----------  ----------   -----------      ----------





                                                                 Adjustments
                                          United        Far          and
Year Ended July 2, 1993, in thousands     States        East     Eliminations     Consolidated
----------------------------------------------------------------------------------------------
                                                                      
Sales to unaffiliated customers         $1,734,486  $1,309,118   $     --         $3,043,604

Transfers between geographic areas         611,507   1,231,510    (1,843,017)         --
                                        ----------  ----------   -----------      ----------
Total net sales                         $2,345,993  $2,540,628   $(1,843,017)     $3,043,604
                                        ----------  ----------   -----------      ----------
                                        ----------  ----------   -----------      ----------
Income from operations                  $   51,527  $  217,500   $     --         $  269,027

Other income, net                           (8,852)     11,261         --              2,409
                                        ----------  ----------   -----------      ----------
Income before income taxes              $   42,675  $  228,761   $     --         $  271,436
                                        ----------  ----------   -----------      ----------
                                        ----------  ----------   -----------      ----------
Identifiable Assets                     $1,073,088  $  958,105   $     --         $2,031,193
                                        ----------  ----------   -----------      ----------
                                        ----------  ----------   -----------      ----------


     Sales and transfers between geographic areas are accounted for at arm's
length prices which, in general, provide a profit after coverage of all
manufacturing costs. Income from operations is net sales less operating
expenses.

     The identifiable assets by geographic area are those assets used in the
Company's operations in each area. The Company's European operations have not
been disclosed as a separate geographic area because European sales are
recorded by subsidiaries in other geographic areas and European identifiable
assets are less than 10% of consolidated assets.

                                     32


     No customer accounted for 10% or more of consolidated net sales in 1995
or 1994. In 1993 one customer accounted for more than 10% of consolidated net
sales for a total of $326,235,000.

     Net foreign currency transaction gains (losses) included in the
determination of net income were $5,086,000, $4,164,000 and $(3,553,000) for
1995, 1994 and 1993, respectively.

LITIGATION

     SECURITIES LITIGATION  In 1988 a series of lawsuits were filed in
Federal Court for the Northern District of California against the Company,
alleging violations of the federal securities laws on behalf of a class of
purchasers of the Company's securities. These lawsuits have been the subject
of much pretrial proceedings, which have had the net effect of narrowing the
claims made against the Company. On February 8, 1995 the Court granted
defendants summary judgment completely dismissing all claims against the
Company. On March 31, 1995 the Court also denied plaintiffs' motion for
reconsideration of the summary judgment decision. Plaintiffs have appealed
this judgment to the Ninth Circuit Court of Appeals.

     In 1991 another series of lawsuits were filed in Federal Court for the
Northern District of California against the Company, alleging violations of
the federal securities laws on behalf of a class of purchasers of the
Company's securities. Discovery is continuing and the trial date has been
continued to October 7, 1996.

     The Company believes the 1988 and 1991 series of securities lawsuits are
without merit and intends to vigorously contest them. The Company believes
that the outcome of these matters will not have a material adverse effect on
the Company's financial condition or results of operations.

     ENVIRONMENTAL MATTERS  The United States Environmental Protection Agency
(EPA) and/or similar state agencies have identified the Company as a
potentially responsible party with respect to environmental conditions at
several different sites to which hazardous wastes had been shipped or from
which they were released. These sites were acquired by the Company from
Ceridian Corporation ("Ceridian") (formerly Control Data Corporation) in fiscal
1990. Other parties have also been identified at certain of these sites as
potentially responsible parties. Many of these parties either have shared or
likely will share in the costs associated with the sites. Investigative
and/or remedial activities are ongoing at such sites.

     The Company's portion of the estimated cost of investigation and
remediation of known contamination at the sites to be incurred after June 30,
1995 was approximately $14,900,000. Through June 30, 1995 the Company

                                     33


had recovered approximately $2,500,000 from Ceridian through its indemnification
and cost sharing agreements with Ceridian and, in addition, expects to
recover approximately $9,800,000 from Ceridian over the next 30 years. After
deducting the expected recoveries from Ceridian, the expected aggregate
undiscounted liability was approximately $5,100,000 at June 30, 1995 with
expected payments of approximately $600,000 in 1999, $304,000 in 2000 and the
remainder thereafter.

     Approximately $14,000,000 of the $14,900,000 total estimated costs
described above is attributable to one site in Omaha, Nebraska. In 1994 the
Company sold the Omaha property; however, the Company retains responsibility
for and has indemnified the buyer with respect to all environmental
contamination existing on the site at the time of sale. IT Corporation, a
nationally known environmental consulting firm, has provided consulting
services to Ceridian and the Company for the Omaha site for several years and
has assisted the Company in estimating the liability related to the cost of
remediation. This liability is based on a plan of investigation and
remediation developed by IT Corporation pursuant to a Consent Order entered
into by the Company and the EPA in 1990. The extent of contamination in the
groundwater has been investigated and generally defined. According to the
plan, the likely technology for remediation of groundwater at the facility
will be pumping and treatment, while remediation of soils will most likely be
accomplished by soil vapor extraction. A substantial portion of the Omaha
liability was discounted by applying a risk free rate of 6% to the expected
payments to be made by the Company over the next 30 years. None of the
liabilities for any of the other sites has been discounted. The total
liability for all sites recorded by the Company after considering the
estimated effects of inflation, reimbursements by Ceridian and discounting
was approximately $3,000,000 at June 30, 1995.

     The Company believes that the indemnification and cost-sharing
agreements entered into with Ceridian and the reserves that the Company has
established with respect to its future environmental costs are such that,
based on present information available to it, future environmental costs
related to currently known contamination will not have a material adverse
effect on its financial condition or results of operations.

     PATENT LITIGATION   In November 1992, Rodime, PLC ("Rodime") filed a
complaint in Federal Court for the Central District of California, alleging
infringement of U.S. Patent No. B1 4,638,383 and various state law unfair
competition claims. No trial date has been scheduled.

                                     34


          On April 17, 1995 the Court granted the Company's motion for
summary judgment that certain of the Company's products did not infringe any
claims of Rodime's patent. With this Order only three (3) of the Company's
products (ST157, ST325 and ST351) remain accused in this action. The Company
currently has under submission with the Court another motion for summary
judgment seeking a judgment that the remaining three products do not infringe
the Rodime patent. In addition, the Company earlier filed a number of other
motions for summary judgment directed to issues other than non-infringement,
and certain of these motions have been denied. However, at the Court's
suggestion the Company has requested further argument on certain of these
motions. In the related action of Quantum Corporation v. Rodime, PLC, a
partially dispositive motion for summary judgment was granted by the District
Court of Minnesota resulting in a final judgment of invalidity of certain
claims of Rodime's U.S. Patent No. B1 4,638,383. Rodime appealed this adverse
judgment to the Court of Appeals for the Federal Circuit and the oral
argument of this appeal was heard on November 10, 1994. The Court of Appeals
has yet to render a decision on this appeal. If the district court's ruling is
upheld, it will establish precedent for the Company's defense, eliminating
certain products from the case.

         It is the opinion of the Company's patent counsel that the Company's
products do not infringe any valid claims of the Rodime patent in suit and
thus the Company refused Rodime's offer of a license for its patents.
However, many other companies, such as IBM, Conner Peripherals,
Hewlett-Packard and a number of Japanese companies have reportedly made
payments to and taken licenses from Rodime.

          On October 5, 1994, a patent infringement action was filed
against the Company by an individual James M. White in the U.S. District
Court for the Northern District of California for alleged infringement of
U.S. Patent Nos. 4,673,996 and 4,870,519. Both patents relate to air bearing
sliders. Prior to the filing of the lawsuit, the Company filed a Petition for
Reexamination of U.S. Patent No. 4,673,996 with the United States Patent and
Trademark Office ("PTO") and this Petition was granted shortly after the
lawsuit was filed. Subsequently, the Company filed a Petition for
Reexamination of U.S. Patent No. 4,870,519. This second petition has also
been granted by the PTO. The District Court stayed the action pending the
outcome of the reexaminations. It is the opinion of  the Company's patent
counsel that the claims of the two White patents are invalid for the reasons
set forth in the two Petitions for Reexamination.

          In May 1995, Personal Computer Peripherals Corporation
(PCPC) filed a complaint against one of the Company's newly acquired
subsidiaries, Palindrome Corporation, and a number of other unrelated
defendants,

                                     -35-



alleging infringement of U.S. Patent No. 5,133,066. The patent
relates to a computer program for backing up data and program files on
computer network systems. On July 31, 1995, without the Company having
answered the PCPC complaint, PCPC voluntarily dismissed the
patent infringement action against Palindrome without prejudice.

          OTHER LITIGATION     Amstrad PLC ("Amstrad") initiated a lawsuit
against the Company in London, England on December 11, 1992 concerning the
Company's sale of allegedly defective disc drives to Amstrad. The Company
replied to the allegations made against it by Amstrad by denying all material
points of Amstrad's claim and asserting many affirmative defenses. Discovery
is continuing and a trial date has been set for April 1996 with various
earlier dates for exchange of fact and expert statements. The Company
believes this lawsuit is without merit and will continue to defend itself
vigorously. The Company believes that the outcome of this matter will not
have a material adverse effect on the Company's financial condition or results
of operations.

          The Company is involved in a number of other judicial and
administrative proceedings incidental to its business. Although occasional
adverse decisions (or settlements) may occur, the Company believes that the
final disposition of such matters will not have a material adverse effect on
the Company's financial position or results of operations.

COMMITMENTS

          LEASES    The Company leases certain property, facilities and
equipment under non-cancelable lease agreements. Land and facility leases
expire at various dates through 2082 and contain various provisions for
rental adjustments including, in certain cases, a provision based on
increases in the Consumer Price Index. All of the leases require the Company
to pay property taxes, insurance and normal maintenance costs.

          Future minimum lease payments for operating leases with initial or
remaining terms of one year or more were as follows at June 30,1995:





                                                                   Operating
In thousands                                                          Leases
------------------------------------------------------------------------------
                                                                
1996                                                                   $24,426

                                     -36-



1997                                                                    18,297

1998                                                                    10,847

1999                                                                     7,777

2000                                                                     7,645

After 2000                                                              41,056
                                                                        ------
                                                                      $110,048
                                                                      --------
                                                                      --------



         Total rent expense for all land, facility and equipment operating
leases was approximately $27,000,000, $23,000,000 and $25,000,000 for 1995,
1994 and 1993, respectively.

          CAPITAL EXPENDITURES    The Company's commitments for construction
of manufacturing facilities approximated $226,000,000 at June 30, 1995.

SUPPLEMENTAL CASH FLOW INFORMATION




In thousands                                            1995    1994     1993
-------------------------------------------------------------------------------
                                                               
Cash Transactions:

     Cash paid for interest                           $33,357  $24,654  $20,920

     Cash paid for income taxes                       137,362   31,021   29,234

Non-Cash Transaction:

     Receipt of note receivable for sale of building     --      5,000      --




ACQUISITIONS

         During the year ended June 30, 1995 the Company acquired
Palindrome Corporation, a storage management software company, and Network
Computing, Inc., NetLabs Inc., Frye Computer Systems, Inc., and
Creative Interaction Technologies Inc., all network management software
companies, and Applied Magnetics Corporation's tape head subsidiary, a
manufacturer of magnetic recording tape heads for digital data storage. These
acquisitions were accounted for as purchases and, accordingly, the results of
operations of the acquired businesses have been included in the consolidated
financial statements from the date of acquisition. The total cost of the
acquired businesses, including acquisition costs was $142,052,000, net of
cash acquired. Goodwill and other intangibles arising from the acquisitions
are being amortized on a straight-line basis over periods ranging from eight

                                     -37-



months to ten years. As a result of the acquisitions, the Company incurred
one time write-offs of in-process research and development totaling
$70,360,000.

          During the same period the Company acquired 25% of the outstanding
voting stock of Dragon Systems, Inc., a developer of advanced speech
recognition technology and products for personal computer and workstation
platforms, 34% of the outstanding voting stock of CVC Holdings, Inc.,
parent of CVC Products, Inc., makers of advanced fabrication equipment
used by semiconductor and data storage device manufacturers, and increased
its investment in SunDisk Corporation, a flash memory manufacturer. The
investment in Dragon Systems, Inc. and CVC Holdings, Inc., combined
with the additional investment in SunDisk Corporation totaled $29,811,000.
Goodwill arising from the investments in Dragon Systems, Inc. and CVC
Holdings, Inc. is being amortized on a straight-line basis over seven
years.



                                     -38-



REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareholders

Seagate Technology

     We have audited the accompanying consolidated balance sheets of Seagate
Technology and subsidiaries as of June 30, 1995 and July 1, 1994, and
the related consolidated statements of income, shareholders' equity and cash
flows for each of the three fiscal years in the period ended June 30,
1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Seagate Technology and subsidiaries at June 30, 1995 and July 1, 1994,
and the consolidated results of their operations and their cash flows for
each of the three fiscal years in the period ended June 30, 1995, in
conformity with generally accepted accounting principles.

                                                             ERNST & YOUNG LLP

San Jose, California

July 11, 1995, except for the last
paragraph of the patent litigation note
as to which the date is July 31, 1995

                                     -39-

EX-21.

                                                           EXHIBIT 21.1

                         SEAGATE TECHNOLOGY, INC.

                      SUBSIDIARIES OF THE REGISTRANT




                                                         STATE OR OTHER JURISDICTION
NAME OF SUBSIDIARY                                       OF INCORPORATION
------------------                                       ---------------------------
                                                      

Seagate Technology International                         Cayman Islands, BWI
Seagate Technology (Thailand) Limited                    Thailand
Seagate Microelectronics Limited                         Scotland
Penang Seagate Industries (M) Sdn. Bhd.                  Malaysia
Seagate Technology GmbH                                  Germany
Nippon Seagate Inc.                                      Japan
Seagate Technology Korea Limited                         South Korea
Seagate Technology S.A.                                  France
Seagate Technology S.r.L                                 Italy
Seagate Technology AB                                    Sweden
Seagate Technology Australia Pty. Limited                Australia
Seagate Technology (Ireland)                             Cayman Islands, BWI
P.T. Seagate Technology                                  Indonesia
Seagate Technology Taiwan Ltd.                           Taiwan
Seagate Foreign Sales Corporation                        Virgin Islands
Seagate Technology International Holdings                Cayman Islands, BWI
Crystal Computer Services, Inc.                          British Columbia, Canada
Palindrome Corporation                                   Delaware
Seagate Tape Technology Inc.                             California
NetLabs, Inc.                                            California
Network Computing, Inc.                                  Texas
Creative Interaction Technologies, Inc.                  North Carolina
Frye Computer Systems, Inc.                              Massachusetts
Palindrome (UK) Limited                                  United Kingdom
Palindrome Australia Pty. Ltd.                           Australia
Seagate Technology (Clonmel)                             Cayman Islands, BWI
Seagate Technology International (Wuxi) Ltd.             Peoples Republic of China
Seagate Technology (Ireland Holdings)                    Cayman Islands, BWI
Seagate Software, Inc.                                   Delaware
Seagate Software GmbH                                    Germany

EX-23.

                                                           EXHIBIT 23.1



               CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS


We consent to the incorporation by reference in this Annual Report (Form
10-K) of Seagate Technology, Inc. of our report dated July 11, 1995 (except
for the last paragraph of the patent litigation note as to which the date is
July 31, 1995), included in the 1995 Annual Report to Shareholders of Seagate
Technology, Inc.

Our audits also included the financial statement schedule of Seagate
Technology, Inc. listed in Item 14(a). This schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion based
on our audits. In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.

We also consent to the incorporation by reference in the Registration
Statements (Form S-8 No. 33-43911, 33-50973, 33-39916, 33-56215, 33-34793),
pertaining to the 1991 Incentive Stock Option Plan, the Employee Stock
Purchase Plan and the Executive Stock Option Plan of Seagate Technology,
Inc., and in the Registration Statements (Form S-3 No. 33-55249, 33-56027) of
Seagate Technology, Inc. and in the related prospectus, of our report dated
July 11, 1995 (except for the last paragraph of the patent litigation note as
to which the date is July 31, 1995), with respect to the consolidated
financial statements incorporated herein by reference, and our report
included in the preceding paragraph with respect to the financial statement
schedule included in this Annual Report (Form 10-K) of Seagate Technology,
Inc.

                                                            ERNST & YOUNG LLP


San Jose, California
August 3, 1995

EX-27

 


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<FISCAL-YEAR-END>                          JUN-30-1995
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