Compaq to Buy Into Computer Graphics Firm : Deals: The 13% stake in Silicon Graphics is expected to give both a boost in the workstation market.

Compaq Computer Corp. will pay $135 million for a 13% stake in Silicon Graphics Inc., the companies announced Wednesday in a joint competitive move within the hotly contested workstation market.

“I wouldn’t be surprised if the Compaq investment in Silicon Graphics helps the companies nail down the technology for the next generation of workstations,” said Peter Kastner, a computer industry analyst with Aberdeen Group Inc. of Boston.

Workstations, basically desktop computers with about three times the power, cost from $5,000 to as much as $75,000.

Houston-based Compaq, maker of high-quality clones of IBM personal computers, has been trying to enter the growing workstation market. It was rumored to be considering a merger with Mountain View, Calif.-based Silicon Graphics.

Silicon Graphics, a leader in workstation graphics because of its 3-D technology, was the first in 1985 to use the high-speed MIPS chips. Silicon Graphics also was an early user of RISC, or reduced instruction-set computing, which simplifies and speeds processing. But the company has found it difficult to reach beyond scientific and technical users.

The deal gives Compaq a boost in entering the workstation market, and Silicon Graphics benefits from Compaq’s mass distribution system, according to the companies.

“We are both very complementary companies,” Silicon Graphics President and Chief Executive Edward McCracken said. “We have the advanced technology and they are real marketing leaders.”

Rod Canion, president and chief executive of Compaq, called the deal between the two companies a “strategic relationship” that will include an emphasis on research and development, with creating an industry standard as the goal.

“Both Compaq and Silicon Graphics are very well positioned for the future,” Canion said, refusing to say whether Compaq would seek a larger stake in Silicon Graphics.

Silicon Graphics lost some ground to competitors such as No. 1 workstation maker Sun Microsystems Inc. of Sunnyvale, Calif., after selling its highly regarded 3-D graphics technology to companies such as IBM. Strong competition also is coming from Hewlett-Packard, which just announced what it claims is the fastest performing workstation at 76 MIPS for up to $20,000.