Mountain View, CA — As reported by David P. Hamilton and Kanh T.L. Tran for The Wall Street Journal, Silicon Graphics Inc. said it is nearing a deal to sell a large piece of its Cray supercomputer unit. Separately, SGI announced a plan to develop a supercomputer with the U.S. government.
The Mountain View, Calif. computer maker said it hopes to reach an agreement in the near future with a noncomputer maker that will take a majority stake in the Cray unit. Beau Vrolyk, an SGI vice president, declined to name SGI’s partner, the price it is seeking or to say when those negotiations will be completed, saying only that SGI’s potential partner isn’t in the computer industry.
That deal, if completed, would mark the beginning of the end of SGI’s difficult history with Cray, which it acquired in early 1996. The market for Cray’s high-end, specialty “vector” supercomputers had started to slump even before SGI purchased the struggling company, and the market continued to decline. One of the few parts of Cray’s original business that has thrived was a unit that made high-end computers based on Sun Microsystems Inc.’s UltraSparc microprocessor – an operation that Sun purchased from SGI in mid-1996.
Although Cray has never come close to recapturing its former glory as the Rolls Royce of the computer industry, Mr. Vrolyk said SGI has succeeded in revamping it to the point that it can survive as an independent company.
“Cray is going to be a little jewel of a company,” he said. “It’s not a piece of junk on the block we’re selling off.”
Mr. Vrolyk, for instance, pointed to a new deal in which SGI will work with the National Security Agency and other federal agencies to develop a high-end supercomputer. That machine, known as the Cray SV2, will combine two computer architectures known as vector and scalar processors. The company said the machine will be designed to handle operations for national defense, but it also could be used in areas such as weather forecasting and aerospace engineering.
SGI said the Cray SV2 will be able to handle 30 trillion computations a second, a rate 10 times faster than the fastest supercomputer available today. An NSA scientist involved in the project said the Cray SV2 will be the only machine made in the U.S. with such processing capabilities.
SGI said the government and the company each has invested over $10 million this year on the project. The company didn’t disclose the total amount of the project or other federal agencies involved. SGI said it began the project six months ago and expects to introduce the new machine by the middle of 2002.