Seattle, Washington-based supercomputer manufacturer Tera Computer Co is gearing up to deliver the second of eight processors ordered by San Diego Supercomputer Center last year, having recently received production network boards from an undisclosed US supplier. Delivery of the second processor, the first having been installed last year, will also spell the beginning of revenues, as the contract specified that the Center would begin to pay after two processors were in place, explained Tera’s chief financial officer, Kenneth Johnson. The company is now preparing a $50m share offering later in the year to fund expansion. The San Diego contract is in fact of greater significance to Tera than its $4m price tag, not only because it means the company will begin to show revenue, but also on account of the nature of the order. The Center is an adjunct of the University of California and is funded by a consortia of federal government agencies led by the National Science Foundation, the purpose of its acquisitions being ‘to evaluate the claims we make for our systems and their performance’. There are two prevailing approaches to supercomputing. There is vector processing, utilized by market leader Cray Research Co. and the three major players from Japan (Fujitsu, Hitachi and NEC); while IBM, Hewlett Packard and others use massively parallel systems, which are primarily installed in government agencies and have ‘no commercial acceptance’ according to Johnson. Tera’s Multithreaded Architecture (MTA) represents a third approach, for which the San Diego sale represents, potentially, an official seal of approval. Tera believes the MTA system in San Diego will show a far greater scalability than the competition, and thus will run faster. If proven correct, it will have justified a ten-year development period for the technology, during which it received $20m in grants from the federal government and another $50m from public and private investors in the US. Johnson reckons high marks for scalability would also open the door to a world supercomputer market estimated conservatively to be worth $2bn a year. He argues, furthermore, that the lack of scalability of traditional solutions has limited its expansion, with a number of industrial and commercial users having gone over to smaller machines because of this problem. ‘The market can be grown,’ he believes. With delivery of the second processor to San Diego likely in the third quarter of this year, with the possibility that the Center will order another eight to scale up to 16 in total, if it gets additional government funding. Tera meanwhile is preparing to expand its manufacturing capabilities, and to this end expects to some $50m in shares to the market to fund that expansion, probably in the third or fourth quarter.
