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Thursday, March 2, 2000 - Page updated at 12:00 AM

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Tera to buy Cray, wants to be supercomputer leader

Seattle Times business reporter

Tera Computer took a quantum leap today when it announced it will acquire the Cray supercomputer unit of Silicon Graphics, a move Tera said would create a profitable new company with a major market presence, complementary product lines and a strong infrastructure.

Terms were not disclosed, but the Cray unit will be bought by the Seattle company with stock, cash and notes. The deal is expected to close within 60 days.

Some reports said Cray, which Mountain View, Calif.-based Silicon Graphics bought for $740 million in 1996, was being sold for less than $100 million. Silicon Graphics in August said it planned to sell Cray and eliminate as many as 1,500 jobs to cut costs and improve sagging results.

The combined company will be named Cray, Tera said, noting that the Cray name is synonymous with supercomputing leadership worldwide. Tera said the deal will create a high-performance and supercomputing powerhouse. It will offer Tera's breakthrough multithreaded architecture - which allows higher performance, broader applicability and ease of programming in a single computer system - and Cray's vector processing, which has led the supercomputing industry the past quarter-century.

The new company is expected to have annual sales of more than $200 million; about 900 workers, including 125 in Seattle; a $2 billion base of more than 600 computers worldwide; major manufacturing and service capabilities; and global customer relationships.

Tera, whose computers have scientific and engineering applications, will use the new company to create the world's foremost supercomputing technology, research and development, manufacturing, sales and service capabilities, said Jim Rottsolk, president and chief executive.

Cray's customers include automotive and aerospace companies, weather-forecasting centers, academic research centers and government.

Polly Lane's phone message number is 206-464-2149. Her e-mail address is: plane@seattletimes.com

Copyright (c) 2000 Seattle Times Company, All Rights Reserved.

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