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May 26, 1987

CRAY RESEARCH WARNS THAT GROWTH WILL SLOW THIS YEAR AS IT WOOS NEW BUSINESS

By CBR Staff Writer

Cray Research Inc shares have been on the slide over the past week as analysts downgraded their forecasts for the company, but Cray is building for long-term growth. A key factor in the expectations that turnover growth will be down on that for recent years is that the company is stressing widening its customer base this year, which will tend to mean that the value of unit sales will be lower – the average unit price will be around $10m, a big fall from the $15m average last year. The company looks to take orders for 50 machines this year, up from 46 last year, but that more than half will come from new users – although of 17 orders so far placed, only seven are with customers new to the company; seven are also from non-US customers. As for installations, the company expects to put in 45 new machines and 10 second-hand ones, up from 35 and 10 last year. On the new models front, the company expects to demonstrate the Y-MP at the end of the year, and start deliveries next year. The Cray 3, being built in Gallium Arsenide, is set for 1990, with a further enhanced – Z-MP? – set for 1992. The company is also investing between some $10m in building an office, software development and supercomputer display complex on 116 acres in Eagan, Minnesota. Construction is due to start in August or September with completion a year later.

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