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TeraStor Unveils 10 and 20 Gigabyte Storage Products.

SAN JOSE, Calif.--(BUSINESS WIRE)--June 8, 1998--

New Near Field Recording Products Offer Highest-Capacity, Most Affordable Removable Storage Solutions for Desktop Through Enterprise Applications

Demonstrating the significant strides TeraStor has made in commercializing its first generation of Near Field Recording(TM) technology, the Company today unveiled the first two members of its family of removable storage products.

The drives announced today provide capacities of 10 and 20 Gigabytes (GB), in the industry-standard 5.25" half-high form factor. These initial products are single-sided removable cartridges with follow-on products to incorporate two-sided cartridges, doubling the available on-line capacity to 40GB. They are the first in a new class of compatible, rewritable mass storage products that deliver five to ten times the capacity of current high volume storage products, at a lower cost-per-gigabyte than existing removable random access storage products.

Bringing NFR Technology to Market

These drives utilize Near Field Recording or NFR(TM), a new category of multi-purpose mass storage technology, that allows for a dramatic and sustainable increase in the areal density -- the bits per square inch of surface -- of a storage medium.

Products incorporating NFR technology provide the high capacity and performance required to meet the needs of high-end data centers, workstations and networked environments, yet will be cost-effective enough for use on the desktop. These products will also satisfy the rapidly expanding storage needs caused by digital convergence and the growth of digital content needed to support expanding Internet and digital entertainment applications.

NFR-based, removable products from TeraStor incorporate a contamination resistant cartridge design along with advanced, state-of-the-art error correction capability establishing a new benchmark for unsurpassed data reliability in both professional and consumer applications.

The first two members of the TeraStor product family will be a 10 and a 20GB drive. These initial products are positioned to meet the market demand for affordable, high-capacity, removable storage. The 10GB product allows for immediate penetration into the medical imaging, desktop publishing, CAD/CAM, multimedia and graphic design markets while the 20GB version serves those markets as well as traditional enterprise online backup and archive applications.

TeraStor will also develop high duty cycle versions of its product family, specifically designed for automated solutions in robotic environments. -0-

Preliminary Specifications for the TeraStor Product Family

Formatted Capacity 10GB 20GB
Form Factor 5.25" Half-High Height 5.25" Half-High Height
Average Seek Times less than 18 ms less than 18 ms
Maximum Transfer Rate
 Internal (Sustained) - greater than greater than
 6MB/Second 11MB/Second
 External (Burst) - 40MB/Second 40MB/Second
Interface Wide Ultra SCSI Wide Ultra SCSI

 NFR technology, in addition to providing the industry's
highest-capacity random access removable storage products, also
provides lower cost of storage compared to other removable storage
products such as tape and magneto-optical (MO). Even more important is
the capacity advantage that NFR technology offers which is sustainable
well into the next decade.
 "TeraStor will meet the needs of users of high-capacity
applications by bringing to market products with tape-like capacities
and disk drive performance. We are setting the standard for the next
generation of mass storage products today," said Jim McCoy, chairman
and CEO of TeraStor.
 "We anticipate that the high-performance and low price points of
the NFR storage solutions offered by TeraStor will immediately make
these products an attractive alternative to removable HDD, tape and
magneto-optical in a multitude of applications. As digital convergence
continues to gain momentum, the need for ever-higher capacity random
access removable media storage devices will grow in importance.
NFR-based products from TeraStor will provide solutions to those needs
far better than any other technology."

Partnering for Success

 As part of its plan to develop, license and commercialize NFR
technology, TeraStor has established strategic alliances with world
class companies. These agreements include:

 -- Hitachi America, Ltd.
 TeraStor will integrate Hitachi America's SH-7021 reduced
 instruction-set computer-type (RISC) microprocessor for
 use in its NFR disk drives.

 -- Imation Corporation
 The agreement includes media co-development with Imation
 licensed as a cartridge supplier to manufacture and sell
 Imation-branded NFR cartridges.

 -- Maxell
 Maxell will develop and manufacture the first surface
 magneto-optical (MO) media for TeraStor NFR disk drives.

 -- Mitsumi Electronics, Inc
 Mitsumi, as a TeraStor manufacturing partner, will
 manufacture NFR drives for TeraStor.

 -- Olympus Optical Co., Ltd.
 Olympus Optical Co., Ltd. will co-design and maufacture
 optics modules to be used in NFR disk drives manufactured
 by TeraStor.

 -- Quantum Corporation
 Quantum has licensed certain key technologies to TeraStor,
 is a partner in the development of NFR technology, and
 is a licensee for NFR products.

 -- Silicon Systems
 TeraStor will integrate multiple chips from Silicon Systems
 into its NFR disk drives. The SSI integrated circuits will
 enable TeraStor to provide high-capacity drives with
 high-performance capabilities.

 -- TOSOH Corporation
 TOSOH Corporation will develop and manufacture first surface
 magneto-optical (MO) media for NFR disk drives manufactured
 by TeraStor.

 -- Yamaha
 Yamaha and TeraStor announced the co-development of a flying
 optical head that incorporates the patented solid immersion
 lens (SIL).




-0-

Managed Storage Initiative

The managed storage initiative, announced by TeraStor in September 1997, was created to encourage leading manufacturers to incorporate its NFR drives and removable cartridges into a broad range of automated, library applications.

These selected companies include ATL Products of Irvine, California; DISC of Milpitas, California; Exabyte of Boulder, Colorado; Overland Data, Inc. of San Diego, California; Plasmon IDE of Minneapolis, Minnesota; and Spectra Logic of Boulder, Colorado. Together with TeraStor, these companies are working to adapt the TeraStor NFR drives and removable cartridges to meet the needs of the library systems of each manufacturer.

Pricing and Availability

The 10GB drive, with first shipment scheduled in the fourth quarter of 1998, is expected to have a manufacturers suggested retail price (MSRP) of between $699 and $799. The 20GB drive, with targeted availability in the second quarter of 1999, is expected to have an MSRP of between $999 and $1,199. Media cartridge availability for the 10GB and 20GB drives will coincide with the shipment dates of each drive.

Exact pricing for all products will depend on volume, product configuration, sales channel and the competitive environment at the time of product shipment. Products will be distributed through direct OEM channels, computer product distributors and ultimately through computer reseller channels.

About TeraStor

Founded in December 1995, TeraStor Corporation designs, manufactures and markets ultra-high capacity, high performance random access storage products based on its proprietary Near Field Recording (NFR) 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.

For additional information, contact TeraStor at 408/914-4000 or at http://www.terastor.com.

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

 CONTACT: TeraStor Corporation
 Nancy Ellickson, 408/914-4000
 nellickson@terastor.com
 or
 Walt & Company
 Maureen O'Connell, 408/496-0900
 moconnell@walt.com


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Geographic Code:1USA
Date:Jun 8, 1998
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