Supercomputers Make Industry Inroads

Supercomputers are moving from lab to office faster than ever as more companies are enticed by computing machines that offer blazing speed for down-to-earth uses.

Analysts and industry officials say supercomputers have become a bright spot in the battered computer industry as a new generation of machines has focused attention on one of the fastest-growing segments of the business.

The extremely powerful machines--used in universities to tackle such complex problems as the mysteries of the cosmos and analyzing human genes--in the past few years have become increasingly common in private industry.

John Jones, an industry analyst at Montgomery Securities, said new supercomputers announced recently by Intel Corp., Thinking Machines Corp. and Cray Research will further boost demand from a variety of companies and industries.

“What we are looking at is a whole new threshold of performance in computation,” said Wendy Vittori, marketing director for supercomputers at Intel, based in Santa Clara, Calif.

Supercomputer sales, now $1.5 billion a year, are expected to grow 8% to 10% the next few years, far faster than overall growth in the sluggish computer industry.

But for the first time, a good part of the growth is starting to come from companies that had shunned the machines as too expensive and impractical.

“The true expansion is coming from the commercial sector,” Jones said.

Intel unveiled its new machine at an Albuquerque trade show last week that, at the high end, can manage 300 billion computations a second, the fastest in the industry.

The computer, dubbed Paragon, can be modified to meet commercial needs and costs $2 million to $55 million a unit.

Vittori said Intel’s supercomputing division is profitable and its sales have been doubling each year over the past few years. She sees this trend continuing with Paragon as more companies seek bigger machines to process ever-growing amounts of information.

While supercomputers are already being used in the automobile and biotechnology industries, greater demand is seen coming from other businesses--the oil industry, for example, to measure the potential size of oil deposits, and on Wall Street to help speed the trading of stocks, bonds and other financial instruments.

Indeed, last week Prudential Securities announced that it was buying a Paragon from Intel.

Also last week, Cray Research, based in Minneapolis, introduced a new machine, the Y-MP C90 supercomputer, that is four times faster than its previous top-of-the-line model.

Cray Chairman John Rollwagen said the new computer will help scientists tackle some big problems, but that Cray also expects strong commercial demand for the computer.

Montgomery’s Jones recommends Cray stock. He projects that earnings will rise to $4.20 a share this year and $4.63 a share in 1992 from $4.02 last year.

While Cray’s machines are built around traditional technology employing a few complex computer chips, there is a move to machines that string thousands of chips together to substantially boost power.

Intel and Thinking Machines are at the forefront of the new technology.

Cambridge, Mass.-based Thinking Machines, whose new CM-5 computer uses 64,000 chips, believes that machines using massive arrays of chips have wide commercial appeal because of their speed and adaptability to common software language.

Thinking Machines recently sold such a supercomputer to American Express Co., one example of the new appeal these computers have in the commercial arena, according to Thinking Machines Vice President John Mucci.

“In a sense, supercomputing is becoming more general and that means the supercomputing market will grow,” Mucci said.