In the beginning of the 1970s, gradual technological improvements over the previous decade resulted in the second generation of Type I tapes. These tapes had uniformly needle-shaped, highly orientable particles (HOP) of much smaller size, around  in length, hence the trade term microferrics. Their uniform shape allowed very dense packing of particles, with less binder and more particles per unit volume, and a corresponding rise in remanence to around . The first microferric (TDK SD) was introduced in 1971, and in 1973 Pfizer began marketing patented microferric powder that soon became an industry standard. In the 20th century, Pfizer had a strong mineral pigment division, with factories in California, Illinois and Indiana. In 1990 Pfizer sold its iron-oxide business to Harrisons & Crosfield of the United Kingdom. The next step was to align needle-shaped particles in parallel with the flux lines generated by the recording head; this was done by controlled flow of liquid magnetic mix over substrate (rheological orientation), or by applying a strong magnetic field while the binder was curing.
Typical microferric cassettes of the 1980s had less hiss and at least  higher MOL than basic Type I tapes, at the cost of increased print-through. Noise and print-through are interrelated, and directly depend on the size of oxide particles. A decrease in particle size invariably decreases noise and increases print-through. The worst combination of noise and print-through occurs in highly irregular formulations containing both unusually large and unusually small particles. Small improvements continued for thirty years, with a gradual rise of squareness ratio from 0.75 to over 0.9. Newer tapes consistently produced higher output with less distortion at the same levels of bias and audio recording signals. The transition was smooth; after the introduction of new, superior tape formulations, manufacturers often kept older ones in production, selling them in different markets or under different, cheaper, designations. Thus, for example, TDK ensured that its premium microferric AD cassette was always ahead of entry-level microferric D, having finer particles and lower noise.