During the first phase of this NSF sponsored Small Business Innovation Research project Nonvolatile Electronics, Inc. demonstrated the potential of achieving high magnetoresistance in thin iron chromium multilayers on gallium arsenide substrates (at room temperature) having low magnetostriction, low required drive fields, and low temperature coefficients of resistance. Phase II research will undertake studies: (i) to create a simplified model to describe the spin valve effect in magnetoresistive materials; and (ii) to develop cobalt permalloy- copper bilayers with greater than six per cent magnetoresistance low magnestorestriction, low temperature coefficient of resistance, and which requires low drive fields. It is expected the results of this research, if successful, will have enormous economic impact on the magnetic recording and computer industries.