In 1988 the Frenchman Albert Fert and the German Peter Grünberg each independently discovered a totally new physical effect – Giant Magnetoresistance or GMR. Very weak magnetic changes give rise to major differences in electrical resistance in a GMR system. A system of this kind is the perfect tool for reading data from hard disks when information registered magnetically has to be converted to electric current. Soon researchers and engineers began work to enable use of the effect in read-out heads. In 1997 the first read-out head based on the GMR effect was launched and this soon became the standard technology. Even the most recent read-out techniques of today are further developments of GMR.

The GMR effect was discovered thanks to new techniques developed during the 1970s to produce very thin layers of different materials. If GMR is to work, structures consisting of layers that are only a few atoms thick have to be produced. For this reason GMR can also be considered one of the first real applications of the promising field of nanotechnology.