Steve S. Chen, the supercomputer design star who left market-leader Cray Research Inc. in September in a much-publicized dispute over development strategy, has found a new financial backer: IBM Corp.
IBM and a company that Chen founded after leaving Cray, Supercomputer Systems Inc. of Eau Claire, Wis., will work to exchange information and produce a new-generation supercomputer, the two firms announced yesterday. Design will be under Chen's control, with IBM providing initial funding.
Details of the deal were being worked out, but analysts yesterday suggested the joint venture could significantly shift the structure of the world's supercomputer industry.
"IBM wants to be in the supercomputer business," said Jay P. Stevens, first vice president at Dean Witter Reynolds. "They are joining a joint venture with one of the finest computer designers in the world to do it. It's important stuff."
"The partnership should provide an opportunity for setting new standards in high-performance computing, leading to overall system performance 100 times faster than today's machines," Chen said in a statement. He was not available for interviews.
The amount of IBM's investment was not disclosed, but industry analysts have long thought that what Chen has in mind would cost at least $100 million, vastly limiting the field of companies that could provide backing for him.
Supercomputers, high-speed machines capable of conducting billions of operations per second, are used in aerodynamic design, weather forecasting, oil surveying and other fields in which researchers wrestle with huge numbers of variables in a short time.
Cray dominates the world market, but is facing increasing competition from the Japanese. And some IBM machines, under certain conditions, can match the computing power of the lower end of Cray's product line, although IBM is not commonly considered to be in the supercomputer business.
At Cray, Chen differed repeatedly with company founder Seymour Cray, industry analysts said. Chen favored simultaneous development of new components and new designs, while Cray wanted to concentrate on design. Chen left Cray when his project was canceled, signing an agreement that his work there would remain Cray property.
Some U.S. industry experts were worried that Chen, seeking backers, would link up with a Japanese company. His expertise and creativity are so respected that any linkup with Japan would have been viewed as a major blow to long-term U.S. competitiveness.
The partnership with Chen is the latest step in a program of technological outreach by IBM, which by tradition has preferred to do things in-house.
Its venture with Chen, however, is not a guaranteed success, andcould take several years to play out.
In trading yesterday, Cray dropped $2.50 to $70.25, while IBM was unchanged at $118.