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MALAYSIAN GOVERNMENT APPROVES NEW KOMAG MANUFACTURING SUBSIDIARY

MALAYSIAN GOVERNMENT APPROVES NEW KOMAG MANUFACTURING SUBSIDIARY
 MILPITAS, Calif., Feb. 20 /PRNewswire/ -- Komag Inc. (NASDAQ: KMAG) the leading supplier of sputtered thin-film disks for high-performance Winchester disk drives has been granted a manufacturing license by the government of Malaysia for a new subsidiary, Komag USA (Malaysia) Sdn. The company also announced that it has reached an agreement to purchase 13 acres of land in the Bayan Lepas Free Trade Zone on Penang Island in Malaysia. The company plans to begin construction of a 220,000 square-foot, state-of-the-art, highly automated manufacturing facility on this site later this month. The architectural firm of Derrick David & Associates of Penang has been retained to design the building. The construction contract for the factory has been awarded to South Island Construction, also based in Penang.
 "After careful study, we concluded that Malaysia is a very appealing location for Komag. In addition to its strategic location close to our customers, Malaysia provides a cost effective manufacturing environment -- one that has the strong technical infrastructure needed to support the process technologies used to manufacture our products," stated Will Kauffman, Komag's senior vice president and chief operating officer. "We are extremely grateful to the Malaysia Industrial Development Authority (MIDA) for granting us a manufacturing license and assisting us in obtaining favorable tax treatment," he added.
 "Our Vision 2020 program encourages companies, such as Komag, that manufacture high-value added products with very sophisticated, capital intensive processes to locate in Malaysia," said Zainal Abidin bin Sulong, MIDA chairman in Kuala Lumpur. "We are extremely pleased to welcome Komag to Malaysia."
 Vision 2020 is the goal set by the Malaysian Prime Minister, Dr. Mahathir Mohamad for Malaysia to achieve the status of an advanced industrialized nation by the year 2020.
 "We are delighted that we have been able to reach an agreement to purchase land in Penang. Noor Ahmad Mokhtar bin Haniff of the Penang Development Corp. was instrumental in reaching that agreement and we are grateful for his assistance," reported Kauffman. "The site is located in the Bayan Lepas Free Trade Zone which has been well planned and developed by the PDC. Water and electricity, which are vital to Komag's operation, are abundant and local vendors can support our manufacturing process through services and supplies. Other American companies located in the Trade Zone have proven successful with high labor productivity through the employment of a well- educated, highly skilled workforce available locally and the support of the Malaysian government," he added.
 Dr. Koh Tsu Koon, chief minister of Penang, will be the guest of honor at the official ground breaking dinner for the new Komag USA (Malaysia) Sdn. plant on March 12, 1992. According to Dr. Koh, companies such as Komag will play a major role in Malaysia's future. "As part of our Vision 2020 program, we are seeking companies which enable Malaysia to compete in the world market with value-added products that are built by high-technology firms. Komag's products add value to the computer data storage industry and are the type desired as we make Vision 2020 a reality. Only the United States and Japan currently manufacture advanced, sputtered thin-film media. Malaysia will become the third country to do so," noted Dr. Koh.
 Komag USA (Malaysia) Sdn. will produce the high-capacity 3.5-inch and smaller sputtered disks. These disks are used in workstations, high-performance desktop personal computers, laptop and notebook computers. The company expects to employ approximately 200 people at its new subsidiary by the end of 1993. The new facility will incorporate Komag's complete disk manufacturing process including proprietary advanced sputtering technology and require the employment of highly skilled personnel. Hiring of managerial and technical staff has recently started. Komag anticipates volume disk production at its Malaysia facility in 1993.
 Although the establishment of the Malaysian subsidiary is anticipated to reduce Komag's long-term manufacturing costs, the initial start-up expenses of Komag USA (Malaysia) Sdn. will adversely affect Komag's financial performance in fiscal years 1992 and 1993.
 Founded in 1983, Komag and its two consolidated subsidiaries (Komag Material Technology Inc. and Dastek Inc.) maintain 610,000 square feet of manufacturing and administrative space in California and Malaysia. Dastek Inc., recently acquired in December 1991, designs, manufactures and markets thin-film heads, a key component used in advanced Winchester disk drives. Komag also operates a technical support facility in Singapore. The company and its consolidated subsidiaries employ approximately 2,500 people. Komag also manufactures and sells thin-film disk products through its unconsolidated join venture, Asahi Komag Co. Ltd., which is among the top three media producers in Japan. The company is traded on the NASDAQ over-the-counter market under the symbol KMAG.
 -0- 2/20/92
 /CONTACT: David H. Allen, Hunt Payne or William L. Potts Jr. of Komag Inc., 408-946-2300; or John Trifari of John Trifari Public Relations, 415-349-9812, for Komag Inc.; or Terence Seow of The P.R. Shoppe Sdn. Bhd., Penang, Malaysia, for Komag Inc., 04-629015/
 (KMAG) CO: Komag Inc. ST: California IN: CPR SU: PDT


DG -- SF009 -- 1207 02/20/92 20:18 EST
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Date:Feb 20, 1992
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