Silicon Graphics builds focus on OEMs

Silicon Graphics of Mountain View, CA, plans to renew its emphasison OEM relationships by forming a new division after merging withmicroprocessor firm MIPS Computer Systems.

Silicon Graphics, which makes image processing workstations formedical imaging and other fields, announced in March that it wouldmerge with MIPS, of Sunnyvale, CA. Concerns about the profitabilityof MIPS caused the stock of both companies to tumble shortly thereafter,forcing them to renegotiate the deal in April. MIPS reported anet first-quarter loss of $12.7 million, down 46% from the firstquarter of 1991.

Despite the losses, both companies forged ahead with the merger.Under the renegotiated deal, MIPS stockholders will receive 0.52shares of Silicon Graphics common stock for each share of MIPScommon stock owned. The merger received stockholder approval fromboth companies last week.

Silicon Graphics sees the business services division now beingformed as one benefit of the partnership with MIPS, accordingto Dave Bagshaw, vice president of marketing. The new divisionwill focus on the needs of OEM customers, Bagshaw told SCAN.

"It takes a long time to work out a program with OEMs,"he said. "You need a dedicated organization to stick withcustomers. We haven't had that in the past, and now we will."

The move is another step in Silicon Graphics' growing emphasison OEM sales. The company has a technology-sharing arrangementwith Diasonics (SCAN 7/31/91). Plans for a major workstation developmentagreement with Compaq Computer fell through earlier this year(SCAN 2/26/92).

Silicon Graphics will also continue to research new medical imagingapplications for its systems, which have been used for facialreconstruction and diagnostic planning for radiation therapy.

In related news, Silicon Graphics announced that 11 corporationshave purchased 1.7 million shares of the company's common stock.The companies' investment is an endorsement of the Silicon Graphics/MIPSmerger, according to Edward McCracken, Silicon Graphics presidentand CEO.

The investing companies are Control Data, Daikin Industries, LSILogic, Integrated Device Technology, NEC, NKK, Sumisho Electronics,Sumitomo, Tandem Computers, Tata Enterprises Overseas and ToshibaAmerica Electronic Components.

BRIEFLY NOTED:

• Fuji Photo Film of Tokyo has signeda computed radiography OEM supply agreement with Yokogawa MedicalSystems, GE's Japanese medical company, according to the TokyoFinancial Wire. Fuji, which already supplies CR equipment to severalimaging vendors, including Toshiba and Philips, will provide itsAC-1 Plus CR unit to YMS.

The 75%-owned GE subsidiary will combine the Fuji CR system witha workstation and other peripheral equipment to form a digitalmedical imaging system that will be sold worldwide as part ofGE's product line. Fuji and GE have also agreed to cooperate indeveloping other advanced medical equipment, the TFW said.