TeraStor Announces Agreement With Yamaha to Co-Develop Flying Optical Head for NFR Disk Drives.

SAN JOSE, Calif.--(BUSINESS WIRE)--April 30, 1998--

TeraStor Combines its Revolutionary NFR Technology with Yamaha's

Magnetic Recording Head Expertise

TeraStor(TM) Corporation today announced an agreement with Yamaha Corporation, Shizuoka, Japan, to co-develop the flying optical head that incorporates the solid immersion lens (SIL), a critical component used in the Near Field Recording(TM) (NFR(TM)) disk drives developed by TeraStor.

This agreement combines Yamaha's skills in the magnetic recording head market with the innovative NFR technology pioneered by TeraStor. Yamaha has already begun development of the heads and expects to begin volume manufacturing in the second half of 1998.

NFR technology, developed by TeraStor, is expected to enable a new class of rewritable mass storage products delivering an order of magnitude capacity advantage at a lower cost-per-gigabyte then all existing storage technologies.

"Yamaha plans to maintain its position as a market leader in the mass storage industry; partnering with companies like TeraStor is part of our strategy," stated Atsushi Toyoda, general manager, thin film head division, Yamaha Corporation. "As a world leader in magnetic recording head manufacturing and development, we are looking to TeraStor, with its NFR technology, to provide the industry with a new benchmark for mass storage."

The first generation removable-media NFR products are planned for initial shipment in 1998 with targeted capacities of up to 20 gigabytes per disk surface. These products are expected to compete with tape, magneto-optical, removable hard disk (HDD) and optical storage solutions in back-up, archive and other managed-storage applications.

"The expertise of Yamaha in developing and manufacturing magnetic recording heads makes them a perfect choice for TeraStor," said Amyl Ahola, President and COO of TeraStor. "We look forward to working with Yamaha to co-develop the flying optical head. This head is an integral component of our NFR disk drives."

Flying Optical Head

The flying optical head used within the NFR drives is similar to those used in hard disk drives (HDD), except that the NFR head contains a magnetic write coil and two optical elements, the objective lens and the solid immersion lens (SIL). The flying optical head is used to position all of these elements in close proximity to the recording disk, and the SIL tightly focuses the laser beam to produce an ultra-small spot size, resulting in dramatically increased areal density.

The flying head, being co-developed by TeraStor and Yamaha, includes optical elements as well as magnetic elements. This head flies several times higher than the heads used in current-generation HDDs, enabling high reliability of the drive.

The relationship between Yamaha and TeraStor to co-develop the NFR flying optical head is a continuing part of TeraStor's strategy to work with world-class companies that have proven expertise and can provide high-volume availability of key components and services as TeraStor brings its products to market.

About TeraStor

TeraStor Corporation designs, manufactures and markets ultra-high capacity, high performance random access storage products based on its proprietary Near Field Recording storage technology. This new class of products features an order of magnitude advantage in disk capacity over other removable disk storage technologies and sets a new mass storage benchmark for affordable high-capacity storage. The first TeraStor Near Field Recording products will be available in 1998. For additional information, contact TeraStor at 408/914-4000 or at http://www.terastor.com. -0-

Note to Editors: TeraStor, Near Field Recording and NFR are trademarks of TeraStor Corporation.

CONTACT: TeraStor Corporation

Nancy Ellickson, 408/914-4184

[e-mail]

or

Walt & Company for TeraStor

Maureen O'Connell or Kristin Jones, 408/496-0900

[e-mail]

[e-mail]

or

Yamaha Corporation

Nick Nishimura, 011-81-53-962-3100

[e-mail]