A new approach of data recording during manufacturing is to store information directly on machine components. This way, the components may serve as their own information carrier throughout the whole manufacturing process, and later in the working cycle. Such a concept is called “gentelligent” (for genetically intelligent) and aims at allowing to inherit fabrication and application data to the product's next generation. This requires a new kind of machine parts, which are capable for collecting, preprocessing, and storing information (e.g. temperature and forces during use of the component) on their surface. For storing the required information, proven principles of the peripheral magnetic data recording including inductive writing and a magneto‐optical readout are applied. The storage medium used is a material developed recently: “magnetic magnesium”, i.e. magnesium filled with hard magnetic particles. To allow a magneto‐optical readout based on the Magneto‐optical Kerr Effect (MOKE), bulk material is covered with a soft magnetic layer, called a keeper layer. The keeper layer is supplied to generate a homogeneous magnetic and reflective surface which is not provided by pure “magnetic magnesium”. This paper describes the development of the recording system. (© 2008 WILEY‐VCH Verlag GmbH & Co. KGaA, Weinheim)