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Technology Stocks : Silicon Graphics, Inc. (SGI) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Davison who wrote (4684)	4/13/1998 4:53:00 PM
From: dav	Respond to of 14451

Any news on the recent SGI move ? thanks dav

To: Jim Davison who wrote (4684)	4/13/1998 10:18:00 PM
From: Jojo Mosko	Read Replies (1) \| Respond to of 14451

Jim, responding to your questions: I have trouble imagining SGI making computers strictly limited to Intel chips. As these chips become more highly integrated, surely it will become more difficult for any computer company to design computers with unusual levels of performance. There are two main considerations here: 1) de-facto standard, software availability. This is THE main reason why to design an Intel based computer. Simply: any other architecture is de-facto in an almost impossible to get out of - niche (see for example Alpha running NT). Based on their upcoming (rumored to be announced this year) WinTel machine, SGI is realizing this. A bit late some would say, but if it can be pulled off it can bring SGI into the high-volume game. 2) Performance and 64-bit support. SGI couldn't have moved to Intel in the high end without giving up on these till Intel introduced a CPU that has a much higher performance and 64-bit support (among other features). The Merced will have this hopefully in 1999. By then, the MIPS advantages in the high- end would be much less relevant. Freeing SGI to focus on its added value (system design, scalability, graphics) rather than on processor design in a much bigger market space. Another question: assuming MIPS is spun off, does this mean that SGI will be adopting a more CRAY-like architecture for its future workstations -- an architecture that does not require MIPS? SGI will be free to use any architecture that makes sense in the marketplace based on application availability, performance, price etc. There's nothing that would prevent SGI from continuing to use MIPS (or Intel) after MIPS is partially spun-out based on current rumors. Finally, I wonder what MIPS prospects will be without SGI -- they still have the General Instrument contract, but if Nintendo drops MIPS (reputed to be a big slice of earnings right now), this company might not be so good as a stand-alone. MIPS prospects without SGI are good. You have to realize that MIPS currently targets two very very different markets: High performance computers (in SGI systems) and the embedded market. It is from the latter that MIPS derives most of its royalties patent licences, etc. It is on the former where most new R&D investment is being made. These two differing business models compete with each other on resources. This is why a possible spin-off makes so much sense. To your question on Nintendo: 2 years ago Nintendo was not contributing anything to the MIPS royalty stream, neither was and hand-held computer running Windows-CE, or Web-TV etc. In the embedded market things change fast, MIPS was able to grow about 10 fold in the last two years and reach 48-million units. I think you should wait for the upcoming ARM IPO to realize how attractive such an embedded RISC CPU licensor is (this IPO will most likely fly very high), then consider that MIPS licensees shipped over 10 times more CPUs than ARM did in 1997.