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January 27, 1997updated 05 Sep 2016 12:48pm

SILICON GRAPHICS BLAMES MANUFACTURING DELAYS FOR SHORTFALL

By CBR Staff Writer

Silicon Graphics Inc ended up blaming delays in gearing up manufacturing of new products for its less than sparkling second fiscal quarter performance, leading chairman Ed McCracken to say he was disappointed with the company’s inability to reach expected shipment levels. Despite our strong bookings, we did not reach expected levels of shipments, due to delays in manufacturing ramp-up for some of our new products announced on October 7 and variations in product mix, he said. The company said its consolidated backlog was $757m at December 31, and product bookings hit $955m – both the highest levels ever for the company. While I’m disappointed in the results, I am encouraged by our customers’ enthusiastic response to our new product line, as evidenced by our strong bookings and backlog, he said. We also had continued strong demand for Cray Research supercomputers. The company said it had sold around 10,000 of the new O2 workstations in the second quarter, adding it would sell far in exess of that in the third quarter and the fourth quarter as well. The jury is still very much out on whether the people that currently use Silicon Graphics workstations to create animation that looks as good as the real thing will ever be persuaded that Windows NT workstations will be up to the task, and all the NT graphics workstation peddlers are doing a whole lot worse than Silicon Graphics is – but even if the company is finding life tougher in the workstation market, the business that the ill-informed thought might drag the company down is going great guns. Last year, its MIPS Technologies Inc unit led the world market for RISC chips in terms of unit volume with 19.2m MIPS architecture chips shipped, according to Semico Research Corp – although when the two top-selling games machines use versions of the chip, that dominance is not too surprising. Better news for Silicon Graphics is that that observers are beginning to disparage Sega Enterprises Ltd’s Saturn as an inferior product because it does not use the MIPS chip. And the company can also bask in the fact that it has now clearly seen off any threat from the PowerPC consortium that some believed would rule in RISC.

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