Silicon Graphics Inc’s Cray Research Inc unit has won round two of its anti-dumping allegations against NEC Corp after the US Department of Commerce issued a preliminary finding that NEC and Fujitsu Ltd are guilty of dumping supercomputers in the US market (CI Nos 2,997, 2,668). If upheld by the International Trade Commission in July – and NEC has filed a suit in the Court of International Trade seeking the appointment of an independent official to conduct the investigation which it says is unfounded and the result of an unfair and biased investigation – anti-dumping duties will be due on every supercomputer shipped into the US market by NEC and Japans two other supercomputer builders, Fujistu and Hitachi Ltd. Cray alleges that NEC is taking a loss of some $122m to supply four vector supercomputers to the US National Center for Atmospheric Research, which was awarded $35.5m in March 1995 by the National Science Foundation (NSF) to expand its existing bank of five Cray supercomputers. By supplying equipment and services Cray estimates to be 4.5 times the value of the procurement, NEC and the other Japanese companies would face a dumping duty of 450% on supercomputer deliveries to the US. On May 20th 1996 the Center announced NEC had won the bid, against rival configurations from Cray and Fujitsu. Cray filed anti-dumping charges last July and in August the NSF told the Center to delay awarding the business to NEC until the complaint is resolved. The Department of Commerces final decision on the complaint is due by June. Cray says it has already supplied the Center with one of its 16 CPU bid systems to tide it over the 18 months the case is taking to investigate. Cray says there are effectively three ways the Center will get its new processors. First the anti-dumping duty deposits on Japanese supercomputer equipment due under the preliminary ruling could be paid and the NEC units installed. Its an unlikely move. Second, the Center could go with its second choice supplier, which hasnt been public. Third, the Center could buy more used Crays (as its currently doing) and re-tender the business once the charge has been settled. Cray denied a recent New York Times report suggesting the Center would scrap its initial evaluation and instead buy a massively parallel Convex machine from Hewlett-Packard Co that can be expanded, arguing it wouldnt meet the Centers initial 5 GFLOPS requirements let alone the stipulation the winner be able to deliver 45 GFLOPS by 1998.
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