Cray Inc. Business Information, Profile, and History

Company Perspectives:

Cray Inc.'s mission is to be the premier provider of supercomputing s olutions for its customers' most challenging scientific and engineeri ng problems. Cray systems are used to design safer vehicles, create n ew materials, discover life-saving drugs, predict severe weather and climate change, analyze complex data structures, safeguard national s ecurity, and a host of other applications that benefit humanity by ad vancing the frontiers of science and engineering.

History of Cray Inc.

Cray Inc. is one of the world's premier producers of supercomputers, a term rather loosely used to denote the fastest computers at any giv e time. The company's high-performance supercomputers, which are capa ble of performing billions of operations per second, are used by gove rnmental agencies for classified and nonclassified applications, by g overnmental and academic research laboratories for scientific researc h, by weather centers for forecasting, and in the automotive and aero space industries for vehicle design. Its product line includes both v ector and massively parallel supercomputers. Now based in Seattle, Cr ay has its main manufacturing operations in Chippewa Falls, Wisconsin , and also maintains offices in Mendota Heights, Minnesota, and Burna by, British Columbia, for software and hardware development, sales, a nd marketing operations. Although as a legal entity, the Cray of the early 21st century was founded in 1987 as Tera Computer Company, the company traces its earliest roots back to Cray Research, founded in 1 972. A pioneer in vector supercomputing, Cray Research was acquired b y Silicon Graphics, Inc. in early 1996 and then was acquired in April 2000 by Tera Computer. Following the deal, Tera renamed itself Cray Inc.

Early History

Cray Research was formed through the efforts of Seymour Cray, a recog nized genius in the design of supercomputers. Cray was born in 1925 i n Chippewa Falls, Wisconsin, and spent a boyhood devoted to tinkering with electronic gear. After service in World War II working as a rad io operator and then functioning as a specialist in breaking Japanese codes, he attended the University of Minnesota, earning a bachelor o f science degree in electrical engineering and another in applied mat hematics, both in 1950. He decided to enter the computer industry and took a job with Engineering Research Associates, founded by William C. Norris. Through a series of mergers, Engineering Research Associat es was brought under the control of Sperry Rand Corporation. Norris l eft Engineering Research Associates and established Control Data Corp oration in 1957. Cray soon followed him to the new company. Among his early projects at Control Data, Cray developed the 1604, one of the first computers to use transistors in place of vacuum tubes.

Control Data shared in the booming computer industry of the 1960s, ex periencing a period of rapid growth. Cray became disenchanted with th e bureaucracy that this growth created and insisted that the company build him a separate research facility in his home town of Chippewa F alls. In this new facility, he came up with the CDC 6600, the first c ommercial computer capable of handling three million program instruct ions per second. Cray's special talent was in putting the circuits of a computer very close together, reducing the time taken for electric signals to pass between them. This closeness, however, increased the heat generated by the circuits. Cray was able to introduce innovativ e ways of removing this heat.

Cray's success at Control Data eventually hit a stumbling block. In 1 972 top management at the corporation halted his plans for a new comp uter, telling him he could continue working on it only after another computer project was completed.

Instead of waiting, Cray and a group of followers left Control Data t o set up Cray Research. Their purpose in starting the new company was to design the first supercomputer, which they ultimately named the C RAY-1. Cray Research situated its research and development and manufa cturing operations in Cray's laboratory in Chippewa Falls while estab lishing a headquarters in Minneapolis, Minnesota. After several years of work on the supercomputer project, the company delivered its firs t computer to the Los Alamos National Laboratory in 1976 for a six-mo nth trial. Cray Research's first official customer, however, was the National Center for Atmospheric Research, which took delivery of a CR AY-1 in July 1977. This sale, totaling $8.86 million, enabled Cra y Research to earn back its original investment.

The CRAY-1 was the fastest computer then available. It used the techn ique of vector processing, which employs a system wherein a series of operations are manipulated at once as opposed to scalar processing w here operations take place one at a time. The CRAY-1 could execute 32 operations simultaneously, making it able to complete ten times the work of some larger systems. While it was delivering its first sale, the company also made its first public offering of stock. The company complemented its supercomputers with software programs, releasing it s Cray Operating System (COS) and Cray Fortran Compiler in 1977.

During its early years of operation, Cray Research sold its supercomp uters to government laboratories and agencies. The main application o f supercomputers was in physical simulation, wherein computer models were used to analyze and forecast the response pattern likely to take place in a system composed of physical variables. Early applications of these models were in gauging the effects of nuclear weapons and i n meteorology. Because these types of applications were performed und er the aegis of the government, it was felt that the market for super computers would be very limited. In 1978, however, Cray Research was given its first order from a commercial organization.

Second Generation Systems: Early 1980s

The CRAY-1 system became the CRAY-1/S and the CRAY-1/M systems. As th e 1980s began, the company decided to begin development of the next g eneration of supercomputers. To concentrate his efforts on that devel opment, Seymour Cray resigned as CEO in 1980, and in 1981 he stepped down as chairman. John Rollwagen became CEO in 1980 and chairman in 1 981. Cray retained his ties with the company as an independent contra ctor and as a member of the board of directors. The new project calle d for the design and development of the CRAY-2, intended to be the fi rst computer on the market that used chips made of gallium arsenide. When the gallium arsenide chips were not available, Cray returned to silicon. The CRAY-2 system was completed in 1985, achieving a perform ance level ten times that of the CRAY-1.

Because the CRAY-2 project contained an element of risk due to its in novative technology, Rollwagen had the company initiate a second proj ect based on a further upgrade of the CRAY-1 technology. Under the di rection of Steve S. Chen, the CRAY X-MP system was devised. This syst em marked the first use of multiprocessors, where a number of micropr ocessors are linked together to take on bigger jobs. Introduced in 19 82, the CRAY X-MP was originally a dual processor, with a speed three times that of the CRAY-1.

As had been done with the CRAY-1, both the CRAY-2 and the CRAY X-MP s upercomputers evolved into more sophisticated systems. The CRAY X-MP served as the basis for a series that consisted of 11 models. The mor e innovative CRAY-2 design had three-dimensional circuit interconnect ions linking circuit boards within a module. Software enhancements we re also made available, with the 1986 introduction of a new operating system, UNICOS, which combined the COS system with the AT&T UNIX System V. This advance was especially important because UNIX was wel l established as the industry standard, especially in areas of scient ific application, where supercomputing was so useful; meanwhile an ad vanced Cray Fortran Compiler, named CF77, was also made available.

Third Generation Systems: Late 1980s

By the mid-1980s Cray Research embarked on producing another generati on of supercomputers, again following several paths. In 1986, Chen be gan working on a new system of highly innovative design, relying on s ignificant technological advances in five different areas. After spen ding nearly $50 million on the project, the company decided to di scontinue it. Chen left the company in 1987, taking 45 engineers from Cray Research, to form Supercomputer Systems, Inc., with plans to bu ild a supercomputer using as many as 256 microprocessors.

Seymour Cray completed design work on the CRAY-3 supercomputer system in 1987. The CRAY-3 marked another effort to use gallium arsenide ch ips, a prospect made more feasible by the production of the first of the new type of chips suitable for computer production in the 1980s. While awaiting the CRAY-3, the company developed and introduced the C RAY Y-MP system, which combined the power of eight central processing units to give it 30 times the power of the original CRAY-1. The CRAY Y-MP was the first supercomputer to sustain a speed of more than one gigaflops (that is, one billion floating-point operations per second ) on many applications.

Cray Research passed two important milestones in 1987. First, it deli vered its 200th computer system, especially noteworthy since it had t aken from 1976 to 1985 to reach a total of 100 computer shipments. Th is rapid expansion made possible the second milestone, the inclusion of Cray Research among the nation's largest companies, listed in the< I> Fortune 500. During this period, the company was able to marke t its supercomputer systems to commercial corporations engaged in pet roleum exploration, automobile production, and the aerospace industry .

Cray Research underwent a major restructuring in 1989. Delays in the development of the CRAY-3 system were creating very high research cos ts, and the scheduled date for completing the project was reportedly postponed. In addition, the company had embarked on another project, the C-90, as a new stage in the CRAY Y-MP product line. Rather than d iscontinue one of the projects, Rollwagen decided to create a new com pany, Cray Computer Corporation, to be headed by Seymour Cray. Locate d in Colorado Springs, Colorado, Cray Computer would continue the dev elopment of the CRAY-3 supercomputer. On November 15, 1989, Cray Rese arch issued shares of Cray Computer to its stockholders, retaining a 10 percent ownership in the new company (which it later sold). Seymou r Cray resigned from the board of directors of Cray Research, severin g formal connections with the company he had formed, although he rema ined a stockholder.

Even after this spinoff Cray Research retained a solid position as th e leading company in the production of supercomputers, with about two -thirds of the world market. In 1989, it phased out the CRAY-2 and CR AY X-MP as new models of the CRAY Y-MP were coming on line. There wer e continuing plans for development of the C-90 project, which was ren amed the CRAY Y-MP/16. The company also began development of enhanced systems for supercomputer networking to facilitate scientists' acces s to Cray supercomputers from a variety of other types and brands of computers. In addition, there were plans to bring to the market an en try-level supercomputer, which would use the technology of the CRAY Y -MP, but would have a much lower price with reduced installation and operating costs.

As the market for supercomputers expanded, Cray Research diversified its sales efforts both in terms of type of customers and geographic r egion. In 1989 governments remained the largest customers, buying 31 percent of Cray Research's output; other important purchasers of Cray machines included universities; aerospace, petroleum, and automotive companies; energy producers; and weather and environment analysts. S ales in North America that year were 61 percent of the total. Approxi mately 75 percent of revenue between 1987 and 1989 was derived from s ales of computer systems, with remaining income from leased systems a nd service fees.

Cray Research also took measures to provide for better distribution o f its products. It entered into an arrangement with Control Data to m ake Cray supercomputers available to Control Data's customers, using Cray products to replace Control Data's line of supercomputers. Marce lo Gumucio, who directed Cray Research's marketing operation, was nam ed president and chief operating officer in 1988. By placing more emp hasis on the marketing of its products, with less attention paid to p roduct development, Cray Research anticipated that it would be better able to meet the challenges of international competition in the supe rcomputer industry.

Surviving the Shakedown Period of the Early 1990s

The early 1990s were a shakedown period in the industry, particularly for independent firms in the United States, and for a time Cray itse lf seemed very vulnerable. Increasing competition from Japanese compu ter giants Fujitsu Limited, Hitachi, Ltd., and NEC Corporation, and f rom U.S. giant Intel Corporation, had by 1990 already cut Cray's mark et share to about 65 percent; this compared to the 80 percent level f or the number of installed supercomputers that were Cray models. Loom ing on the horizon were several upstart companies seeking to build le ss expensive but still very powerful models--such companies as Allian t, Convex Computer, Kendall Square Research, nCube, Supercomputer Sys tems, and Thinking Machines--or create high-end models such as Seymou r Cray's Cray Computer. At the same time, with the end of the Cold Wa r and cutbacks or slowdowns in government spending worldwide, Cray Re search faced the decline of its core market, government agencies and laboratories, the military, and government-supported entities such as universities and research centers.

Facing these threats, Rollwagen reportedly realized in 1990 that he h ad put the wrong man in charge in the person of Gumucio. Just when Cr ay needed more than ever to tap into its engineers' expertise, Gumuci o's formal management style stifled their creativity and dampened mor ale. The more inspiring figure of Rollwagen resumed operating respons ibilities.

At the end of 1990, Cray's install base stood at 262 systems in 20 co untries. With little chance to expand within its core governmental ma rket, Rollwagen knew that future growth would have to come from the c ommercial sector, notably the aerospace, automotive, financial, healt hcare, and telecommunications industries; in order to penetrate these new markets, Cray itself would have to start offering lower-priced m odels.

Initially, Cray moved into the low-end supercomputer market through a cquisitions. In early 1990 it made its first move by acquiring Supert ek Computers, Inc., a troubled California-based maker of Cray-compati ble minisupercomputers, general-purpose scientific computers that are not as powerful as standard supercomputers. Since minisupercomputers sold for as little as $250,000, Cray viewed them in part as an e ntry level for new customers who might later be tempted to invest in a multimillion-dollar supercomputer. Also on the low end was the 1991 purchase of the superserver (high-end servers within a client-server environment) assets of the bankrupt Floating Point Systems, which be came Cray Research Superservers, Inc. The following year this new sub sidiary introduced its first product, the Cray S-MP, which was design ed for the widely used Sun Microsystems, Inc.'s SPARC processor clien t-server environment.

Meanwhile, Cray's newly energized product development program produce d results on both the low and high end. Within one month in late 1991 , Cray introduced an entry-level system priced at about $340,000 called the Y-MP EL and its fastest vector supercomputer to date, the C90, with operational speed four times that of its previous fastest m odel. Cray had also begun work on a new type of supercomputer (at lea st for Cray), a massively parallel processing (MPP) system. Long tout ed by some analysts as the inevitable successor to the vector systems pioneered by Cray, MPP systems linked a number of standard microproc essors to create a virtual supercomputer at a potentially much lower cost than vector systems. MPP systems were the type that the upstart supercomputer companies were developing.

In 1992, even though its entry level system resulted in 70 new custom ers and exceeded the company's sales projections, Cray posted a net l oss of $14.86 million. Its new products and acquisitions not yet paying off in full, the firm had to take a $42.8 million restruct uring charge late in the year to cut costs; it closed one plant and e liminated 650 jobs, or one-eighth of the workforce.

Early in 1993, Rollwagen resigned after President Bill Clinton nomina ted him for the position of deputy secretary of commerce (a position for which he was never confirmed). Rollwagen was replaced by John F. Carlson, a 16-year Cray veteran. Later that year, Cray's first MPP sy stem was rolled out, the T3D. Although scoffed at by rivals because i t had to be linked to a standard Cray vector system, the T3D outperfo rmed other MPP systems and helped put a number of the upstart firms o ut of business (such as Thinking Machines and Kendall Square Research ) or into the arms of larger firms (such as Convex Computer which was acquired by Hewlett-Packard Company in 1995).

Although Cray returned to profitability in 1993, additional restructu ring was needed to improve the company's operations. In 1994, which s aw the resignation of Carlson, an $8.3 million charge was incurre d, while in 1995, when J. Phillip Samper, former vice-chairman of Eas tman Kodak and former president of Sun Microsystems, became chairman, $187.7 million in charges were booked. The 1995 charges contribu ted to a full-year loss of $226.4 million, but were incurred with in a critical year in which three major new products were introduced: a new low-end J90 series; a new high-end vector system, the T90 seri es (touted as the first wireless supercomputer and five times faster than its predecessor, the C90 series); and Cray's second-generation M PP system, the T3E. The last of these, unlike its predecessor, did no t need to be connected to a traditional vector supercomputer and had a top theoretical speed of one teraflops (one trillion operations per second), a long sought after speed level. On the basis of these intr oductions, Cray built up by year-end 1995 a $437 million order ba cklog. Even without having filled the backlogged orders, Cray could s till boast of having increased its installed base to 758 systems in 3 7 countries (nearly three times the level of 1990).

1996-99: The Silicon Graphics Interregnum

By early 1996, Cray Research was the only independent supercomputing firm left. Among the victims was Cray Computer, which declared bankru ptcy early in 1995. (In September 1996 Seymour Cray died at age 71 as the result of an automobile accident in Colorado Springs.) Cray Rese arch had survived and now had a range of products to offer from lower -end superservers and minisupercomputers to entry-level supercomputer s to high-end vector and MPP supercomputer systems. But it now compet ed directly with several firms with much deeper pockets, the Japanese computer giants and Intel on the high end and Hewlett-Packard, IBM, Sun Microsystems, and Silicon Graphics, Inc. (SGI) on the lower works tation end. Thus when SGI, a leader in high-powered workstations with a particular emphasis on graphics-oriented systems, made a friendly takeover offer early in 1996, Samper and other Cray executives decide d to accept the offer rather than attempt to continue to compete agai nst such giants. The $745 million deal, completed in June 1996, b olstered SGI's position in the technical-computing arena and simultan eously ended the era of independent supercomputer companies, at least for a time.

Although no longer independent, Cray Research had survived the early 1990s and counted on tapping into SGI's deep pockets to develop futur e systems. It had to do so, however, without Samper, who resigned sho rtly after the takeover and who had been credited with turning Cray a round in his brief tenure to the point that it was desired by SGI. Ro bert H. Ewald, who had been Cray's president and chief operating offi cer, was named general manager of Cray, in charge of day-to-day opera tions for the now wholly owned subsidiary of SGI.

Nearly concurrent with SGI's acquisition of Cray, SGI engineered the sale of Cray's unit that focused on high-end computers based on Sun M icrosystems's UltraSparc microprocessor (the unit having evolved out of Cray's 1991 acquisition of Floating Point Systems). The machines p roduced by this unit competed directly with one of SGI's existing lin es, so it was sold to Sun for an undisclosed sum.

Ironically, at the time of SGI's purchase of Cray, this unit was one of few thriving areas at Cray. The company's core vector supercompute r operations were already beginning to slump, and that sector of the market continued to decline over the next few years. Rather than inve sting in Cray, SGI instead pulled the plug on successors to both the T90 and T3E and allowed Cray to develop only one new supercomputer, t he SV1, which debuted in 1998 and was about twice as fast as previous Cray models. Cray was at the same time expending much energy fightin g legal battles against its Japanese rivals, particularly NEC, accusi ng the firm of "dumping," selling its supercomputers below cost in th e U.S. market. In September 1997 the U.S. Commerce Department ruled i n favor of Cray, imposing dumping duties of 454 percent on NEC superc omputers, effectively barring the firm from the U.S. market. Cray and NEC continued to battle over this dispute in various venues, but in the meantime SGI, attempting to turn around its now struggling operat ions, was in near continuous restructuring mode, including overhauls that slashed Cray's workforce from more than 4,500 to around 800 empl oyees. About the only positive development of this dark period in Cra y's history, which some Cray staffers later derisively dubbed "the oc cupation," was a deal that the company struck in 1998 with the Nation al Security Agency and other federal agencies to develop a new vector supercomputer initially dubbed the SV2. In August 1999 Silicon Graph ics announced that it would sell Cray as part of yet another restruct uring.

Creation of the New Cray Following 2000 Acquisition by Tera Comput er

The SGI "occupation" ended in rather surprising fashion in April 2000 . That month a much smaller, upstart supercomputer firm, Tera Compute r Company, acquired Cray Research for less than $100 million ( 6;50.3 million in cash plus one million shares of Tera's common stock ). Tera was founded in 1987 in Washington, D.C., by James Rottsolk an d Burton Smith, the former taking the operational lead and the latter serving as chief scientist. One year later, the founders moved the o peration to Seattle, Washington, in order to be near the University o f Washington and its first-rate computer science department and becau se they thought a location in the trendy Pacific Northwest would make it easier to attract top computing talent. Tera was established to d evelop a new kind of supercomputer, an MPP machine, but one with "sha red memory." This type of computer was designed to split a problem in to many smaller pieces, which are sent to many processors at once for simultaneous computation, an approach that was often compared to the way a secretarial pool works. The Tera design held out the promise o f greater speed because the processors would be used more efficiently .

As it worked to develop its first model, Tera stayed afloat through a variety of funding sources, including a contract from the Defense Ad vanced Research Project Agency (DARPA), an arm of the U.S. Department of Defense; a public offering of stock in 1995, after which Tera was listed on the NASDAQ; and a number of private placements of stock an d warrants. In early 1998 Tera finally delivered its first computer, called the MTA, to the San Diego Supercomputing Center in a deal unde rwritten by the Defense Department and the National Science Foundatio n. When it bought Cray Research two years later, this was still the f irm's sole installation.

Immediately upon completing its takeover of Cray Research, Tera renam ed itself Cray Inc. in an acknowledgment of Cray's longer legacy and greater name recognition. The new Cray kept its Seattle headquarters but retained a significant presence in Chippewa Falls, which remained the hub for research and development and manufacturing. While contin uing to sell the old Cray's T3E and SV1 models, the new Cray focused its initial efforts on developing the SV2, soon redubbed the X1. As s ort of a stopgap measure while developing the X1, Cray resolved its l ongstanding dispute with NEC in early 2001. NEC invested $25 mill ion in Cray in exchange for Cray becoming a distributor of the NEC SX series of supercomputers, with exclusive North American rights and n onexclusive rights elsewhere. This deal lasted just two years: in 200 3 NEC sold its investment in Cray and canceled the company's exclusiv e distribution rights, although Cray continued as a nonexclusive dist ributor of NEC supercomputers worldwide.

In the meantime, Cray hired an IBM executive, Michael Haydock, as pre sident and CEO in October 2001, with Rottsolk remaining chairman. Jus t five months later, however, Haydock resigned after clashing with th e board of directors on the company's direction. Rottsolk reassumed H aydock's former positions. Late in 2002 Cray released the long-awaite d X1, which enabled the company to eke out a profit of $5.4 milli on on revenues of $155.1 million following years of losses. The f irst version of the X1 had a top speed of 51 teraflops, 25,000 times faster than a Pentium 4 personal computer, achieved via an architectu re that was vector-based but that enabled the processors to share eac h other's memory. Early in 2003 Cray received $62 million in orde rs for the X1 from the U.S. government, one of the largest contracts in company history. Concurrently, Cray in October 2002 had entered in to a $90 million contract with Sandia National Laboratories of Al buquerque, New Mexico, to develop a new supercomputer seven times mor e powerful than the lab's existing model, a project dubbed Red Storm. Emboldened by these successes, Cray completed a secondary offering o f its stock in early 2003, raising about $50 million.

In July 2003 Cray was awarded a $49.9 million contract by DARPA t o develop a prototype of a supercomputer with a balanced vector/scala r design and capable of sustained performance of more than one petafl ops (one quadrillion floating-point operations per second) by 2010. T his award was part of a contest sponsored by DARPA, the other two con testants being Sun Microsystems and IBM. Financial results for 2003 w ere promising: net income of $63.2 million on revenues of $23 7 million.

The Red Storm project came to fruition in 2004 as Cray began shipping the computer hardware to Sandia in installments, with the final ship ment coming in the first quarter of 2005. In October 2004 Cray introd uced a commercial version of Red Storm, which it dubbed the XT3, posi tioning it as the company's third-generation MPP system, following th e T3D and T3E. The XT3 combined Cray's traditional high-bandwidth con nections on the chips and circuit boards and between the cabinets tha t comprise the supercomputer with a number of inexpensive, off-the-sh elf processing units, particularly the 64-bit Opteron processor from Advanced Micro Devices, Inc., using a Linux-based operating system.

In April 2004 Cray went down market when it acquired OctigaBay System s Corporation for about $115 million in stock and cash. Based in Burnaby, British Columbia, OctigaBay was in the process of developing a supercomputer comparable in design, but not power, to other Cray p roducts but at a much lower price. Cray subsequently renamed the acqu ired firm Cray Canada Inc. and in October 2004 released the firm's pr oduct as the Cray XD1 system. Another important development came in M ay 2004 when Cray was selected by the U.S. Department of Energy to pr ovide most of the hardware for a new supercomputer at Oak Ridge Natio nal Laboratory that planners hoped would be the fastest civilian rese arch computer in the world. The goal was to create a machine with a s ustained speed of 50 teraflops, which would surpass the then world le ader, Japan's 40-teraflop Earth Simulator (installed in 2002). IBM an d Silicon Graphics were also selected as partners in the project.

In addition to working feverishly on the XT3 and XD1 projects, Cray w as also hard at work in 2004 developing a major upgrade to the X1, th e X1E, sales of which began in March 2005. The new model boasted a to p speed of 147 teraflops. Cray's transition from just the one model, the X1, to its three-supercomputer lineup was unfortunately a rough o ne. The firm missed several of its delivery dates, cutting 2004 reven ues to just $149.2 million. Cray was forced to restructure, annou ncing in July that about 100 employees (out of a workforce of 925) wo uld be laid off. Various charges totaling more than $62 million, coupled with the revenue shortfall, led to a net loss for the year of $204 million.

Cray's difficulties continued in 2005, when customer delays for sever al large supercomputer orders adversely affected cash flow. In June t he company announced the layoff of an additional 90 employees and tem porary pay cuts for the remaining U.S. employees making more than 6;50,000 per year. By this time a leadership transition was also well underway. In March 2005 Peter J. Ungaro was promoted to president, h aving joined Cray in August 2003 as senior vice-president of sales, m arketing, and service; he came to Cray from IBM, where he had been vi ce-president of worldwide deep computing sales. Ungaro was named CEO in August 2005, when Rottsolk announced his retirement. Taking over a s nonexecutive chairman was Stephen C. Kiely, a company director sinc e 1999 and a tech executive serving simultaneously as chairman of Str atus Technologies Inc. The other cofounder of Tera Computer, Burton S mith, remained Cray's chief scientist. Cray's new leaders seemed conf ident that a return to profitability was in the offing, once producti on of the new product lineup had been fully ramped up.

Principal Subsidiaries: Cray Federal Inc.; New Technology Ende avors, Inc.; Cray Australia Pty Ltd.; Cray Brazil, Inc.; Cray Computa dores do Brasil Ltda. (Brazil; 99.9%); Cray Canada Inc.; Cray Can ada (Washington), Inc.; Cray Canada Corp./Societe Cray Canada; Cray C hina Limited; Cray Computer Finland Oy; Cray Computer SAS (France); C ray Computer Deutschland GmbH (Germany); Cray Supercomputers (Israel) Ltd.; Cray Italy S.r.l.; Cray Japan, Inc.; Cray Korea, Inc.; Cray Ne therlands B.V.; Cray Computer South Africa (Proprietary) Limited; Cra y Computer Spain, S.L.; Cray-Tera Sweden AB; Cray Computer GmbH; Cray Taiwan, Inc.; Cray U.K. Limited.

Principal Competitors: International Business Machines Corpora tion; NEC Corporation; Hewlett-Packard Company; Silicon Graphics, Inc .; Dell Inc.; Sun Microsystems, Inc.; Intel Corporation; Advanced Mic ro Devices, Inc.

Chronology

• Key Dates:
• 1972: Seymour Cray forms Cray Research, headquartered in Minne apolis with research and development and manufacturing operations in Chippewa Falls, Wisconsin.
• 1976: Cray delivers its first computer, the CRAY-1 model, to t he Los Alamos National Laboratory.
• 1977: The National Center for Atmospheric Research takes deliv ery of a CRAY-1, becoming the company's first commercial customer.
• 1985: The second-generation CRAY-2 is introduced.
• 1987: Tera Computer Company is founded in Washington, D.C., by James Rottsolk and Burton Smith; the firm soon relocates to Seattle, Washington.
• 1988: The CRAY Y-MP makes its debut.
• 1989: Company spins off the CRAY-3 supercomputer project into a separate company, Cray Computer Corporation, headed by Seymour Cray (who would die in an auto accident in 1996).
• 1993: Cray Research introduces its first massively parallel pr ocessing (MPP) system, the T3D supercomputer.
• 1996: Silicon Graphics, Inc. (SGI) acquires Cray Research for $745 million.
• 2000: In a deal valued at less than $100 million, SGI sell s Cray Research to Tera Computer Company, which renames itself Cray I nc.
• 2002: Cray releases the X1, a scalable vector supercomputer.
• 2004: OctigaBay Systems Corporation is acquired, leading to th e introduction of the Cray XD1 supercomputer; the XT3, a third-genera tion MPP system, debuts.