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Hutchinson Technology Reports Fourth Quarter Loss On Reduced Volume

Cautionary Note Regarding Forward-Looking Statements

This announcement contains forward-looking statements, including statements regarding demand for and shipments of the company's products, production capability and costs, assembly operations in Thailand, product commercialization and adoption, capital expenditures, cost reductions, operating performance and financial results. The company does not undertake to update its forward-looking statements. These statements involve risks and uncertainties. The company's actual results could differ materially from those anticipated in these forward-looking statements as a result of changes in market demand and market consumption of disk drives or suspension assemblies, changes in demand for our products, market acceptance of new products, the company's ability to produce suspension assemblies at levels of precision, quality, volume and cost its customers require, changes in product mix, changes in customers yields, changes in storage capacity requirements, changes in expected data density, changes in the company's ability to establish an assembly operation in Asia, changes in the company's ability to reduce costs and other factors described from time to time in the company's reports filed with the Securities and Exchange Commission.



                 Hutchinson Technology Incorporated
        Condensed Consolidated Statements of Operations - Unaudited
                (In thousands, except per share data)

                            Thirteen    Thirteen  Fifty-Two  Fifty-Two
                              Weeks      Weeks      Weeks      Weeks
                              Ended      Ended      Ended      Ended
                            ---------  ---------  ---------  ---------
                            Sept. 26,  Sept. 27,  Sept. 26,  Sept. 27,
                              2010       2009       2010       2009
                            ---------  ---------  ---------  ---------

 Net sales                  $  74,026  $ 103,242  $ 347,189  $ 408,022

 Cost of sales                 74,060     85,778    314,224    400,488
                            ---------  ---------  ---------  ---------

  Gross (loss) profit             (34)    17,464     32,965      7,534

 Research and development
  expenses                      5,293      4,716     21,429     26,776

 Selling, general and
  administrative expenses      15,215     10,228     55,601     54,880

 Severance and other
  expenses                      3,674        378      3,674     29,586

 Asset impairment and
  other charges                    --         --         --     71,809
                            ---------  ---------  ---------  ---------

  (Loss) income from
   operations                 (24,216)     2,142    (47,739)  (175,517)

 Interest expense              (3,652)    (4,653)   (15,876)   (19,762)

 Interest income                   70        308      1,311      3,184

 Other income, net              1,099        750      2,356      1,536

 Gain on extinguishment
  of debt                          --      3,155          6     17,253

 Impairment of long-term
  investments                      --         --       (319)     4,390
                            ---------  ---------  ---------  ---------

  (Loss) income before
   income taxes               (26,699)     1,702    (60,261)  (168,916)

 Provision (benefit) for
  income taxes                    107        (55)    (1,585)      (209)
                            ---------  ---------  ---------  ---------

  Net (loss) income         $ (26,806) $   1,757  $ (58,676) $(168,707)
                            =========  =========  =========  =========

 Basic (loss) earnings
  per share                 $   (1.15) $    0.08  $   (2.51) $   (7.27)
                            =========  =========  =========  =========

 Diluted (loss) earnings
  per share                 $   (1.15) $    0.08  $   (2.51) $   (7.27)
                            =========  =========  =========  =========

 Weighted-average common
  shares outstanding           23,366     23,353     23,362     23,214
                            =========  =========  =========  =========

 Weighted-average common
  and diluted shares
  outstanding                  23,366     23,503     23,362     23,214
                            =========  =========  =========  =========


                  Hutchinson Technology Incorporated
           Condensed Consolidated Balance Sheets - Unaudited
                  (In thousands, except shares data)

                                                  Sept. 26,  Sept. 27,
                                                    2010       2009
 ASSETS                                           ---------  ---------
 Current assets:
  Cash and cash equivalents                        $ 55,639  $ 106,391
  Short-term investments                             48,899     96,316
  Trade receivables, net                             47,629     63,448
  Other receivables                                   7,849      8,445
  Inventories                                        53,568     46,878
  Other current assets                                2,353      4,932
                                                  ---------  ---------
   Total current assets                             215,937    326,410
 Long-term investments                                   --     24,316
 Property, plant and equipment, net                 258,233    279,336
 Other assets                                         5,542      5,425
                                                  ---------  ---------
                                                  $ 479,712  $ 635,487
                                                  =========  =========

 LIABILITIES AND SHAREHOLDERS' INVESTMENT
 Current liabilities:
  Current maturities of long-term debt            $   1,280  $ 102,804
  Accounts payable                                   15,788     17,536
  Accrued expenses                                    8,593     11,183
  Accrued compensation                               12,911     13,139
                                                  ---------  ---------
   Total current liabilities                         38,572    144,662
 Long-term debt, less current maturities                271        946
 Convertible subordinated notes                     174,920    166,464
 Other long-term liabilities                          1,271      1,705
 Shareholders' investment:
  Common stock $.01 par value, 100,000,000 shares
   authorized, 23,371,000 and 23,359,000
   issued and outstanding                               234        234
  Additional paid-in capital                        422,089    418,572
  Accumulated other comprehensive  income               630      2,503
  Accumulated loss                                 (158,275)   (99,599)
                                                  ---------  ---------
   Total shareholders' investment                   264,678    321,710
                                                  ---------  ---------
                                                  $ 479,712  $ 635,487
                                                  =========  =========


                  Hutchinson Technology Incorporated
     Condensed Consolidated Statements of Cash Flows - Unaudited
                       (Dollars in thousands)

                                                  Fifty-Two  Fifty-Two
                                                    Weeks      Weeks
                                                    Ended      Ended
                                                  ---------  ---------
                                                  Sept. 26,  Sept. 27,
                                                    2010       2009
                                                  ---------  ---------
 Operating activities:
  Net loss                                        $ (58,676) $(168,707)
  Adjustments to reconcile net loss to
   cash provided by operating activities:
    Depreciation and amortization                    52,874     76,566
    Stock-based compensation                          3,462      4,244
    Non-cash interest expense                         8,456      8,793
    Asset impairment charge                           2,294     71,640
    Loss (gain) on short- and long-term
     investments                                        319     (4,390)
    Gain on extinguishment of debt, net                  (6)   (17,253)
    Loss (gain) on disposal of assets                   173     (1,762)
    Severance and other expenses                      1,025         --
    Changes in operating assets and liabilities       5,159     50,169
                                                  ---------  ---------
     Cash provided by operating activities           15,080     19,300
                                                  ---------  ---------

 Investing activities:
  Capital expenditures                              (32,481)   (20,609)
  Proceeds from the sale of PP&E                         --     12,205
  Purchases of marketable securities                (71,739)   (46,883)
  Sales/maturities of marketable securities         141,126    133,819
                                                  ---------  ---------
    Cash provided by investing activities            36,906     78,532
                                                  ---------  ---------

 Financing activities:
  Net proceeds from issuance of common stock             55      1,508
  Net proceeds from loan                                 --     55,699
  Repayment of long-term debt                      (102,793)  (110,957)
                                                  ---------  ---------
    Cash used by financing activities              (102,738)   (53,750)
                                                  ---------  ---------

 Net (decrease) increase in cash and
  cash equivalents                                  (50,752)    44,082

 Cash and cash equivalents at beginning of period   106,391     62,309
                                                  ---------  ---------

 Cash and cash equivalents at end of period       $  55,639  $ 106,391
                                                  =========  =========


                  Hutchinson Technology Incorporated
               Earnings Per Share Calculation - Unaudited
                 (In thousands, except per share data)

                            Thirteen   Thirteen   Fifty-Two  Fifty-Two
                              Weeks      Weeks      Weeks      Weeks
                              Ended      Ended      Ended      Ended
                            ---------  ---------  ---------  ---------
                            Sept. 26,  Sept. 27,  Sept. 26,  Sept. 27,
                              2010       2009       2010       2009
                            ---------  ---------  ---------  ---------

 Net (loss) income (A)      $ (26,806) $   1,757  $ (58,676) $(168,707)
 Plus:  interest expense on
  convertible subordinated
  notes                            --         --         --         --
 Less:  additional profit
  sharing expense and
  income tax provisions            --         --         --         --
                            ---------  ---------  ---------  ---------
 Net (loss) income available
  to common
  shareholders (B)          $ (26,806) $   1,757  $ (58,676) $(168,707)
                            =========  =========  =========  =========

 Weighted average common
  shares outstanding (C)       23,366     23,353     23,362     23,214
 Dilutive potential
  common shares                    --        150         --         --
                            ---------  ---------  ---------  ---------
 Weighted-average common and
  diluted shares
  outstanding (D)              23,366     23,503     23,362     23,214
                            =========  =========  =========  =========

 Basic (loss) earnings per
  share [(A)/(C)]           $   (1.15) $    0.08  $   (2.51) $   (7.27)
 Diluted (loss) earnings
  per share [(B)/(D)]       $   (1.15) $    0.08  $   (2.51) $   (7.27)
CONTACT: Hutchinson Technology Inc.
         Investor Contact:
         Chuck Ives
           320-587-1605
         Media Contact:
         Connie Pautz
           320-587-1823

Hutchinson Technology Incorporated Logo

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