Word: cray
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...designing a supercomputer and getting it to market are two different things, and with his latest machine Cray may have pushed the technology one step too far. Not only does the 16-processor Cray-3 contain four times as many central calculating units as the Cray-2 (an increase that more than quadruples its complexity), but it relies on an as-yet-unproved technological advance: replacing silicon chips with faster ones made of gallium arsenide. Add to Cray's headaches the fact that his new computer is so compact that assembly by hand is difficult. Before production could begin...
...Cray Research, meanwhile, has had other troubles. Sales are sluggish, profits are down and its stock price has plummeted. With R. and D. expenses growing nearly 35% a year, Chairman John Rollwagen found himself having to choose between two projects: the Cray-3 and the C-90, an extension of the company's bread-and-butter Cray Y-MP line...
...Rollwagen tells it, the decision turned on a chat he and Cray had four weeks ago in Colorado Springs. "I said to him, 'It's not working, is it, Seymour? It isn't feeling right.' " The two discussed options short of a total split, but Cray kept pressing. "It's almost like he forced me to turn the page," says Rollwagen. "He said, 'Isn't there ((an option)) that would be even cleaner? Let's get on to that one.' It just became very clear to the two of us that this was the right thing...
Reaction was swift. On Wall Street Cray's stock fell 10% in one day. In Japan some thought they smelled a "political maneuver." Since U.S. agencies like to have at least two bidders on any contract, the exit of ETA opened a window of opportunity for Cray's Japanese rivals. The Cray split, they suspect, may have been designed to close that window. Cray officials do not deny it. Chuckles one: "They got the message in a hurry...
Surprisingly, given the relative sizes of the two Crays, some experts voice more concern about the future of Cray Research than they do about Cray Computer. Few doubt that the smaller spin-off firm will be able to raise all the money it needs. As John Sell, president of the Minnesota Supercomputer Center, puts it, "Seymour is magic in this business." Whether Cray Research can flourish without its founding genius remains to be seen. Analysts say that within three to five years it should be clear whether the company has wisely cut its losses or created a killer competitor...