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SGI shifts attention to China

By Tuo Yannan | China Daily | Updated: 2011-08-30 07:50

SGI shifts attention to China

Computer equipment provider predicts rapid sector development

BEIJING - Silicon Graphics Inc (SGI) announced it will double the size of its Chinese workforce and expects sales revenue in the country to increase fivefold to $50 million over the next three years in an exclusive interview with China Daily.

The US-based SGI, the fourth-largest high-performance computing and cloud-computing equipment provider worldwide by sales revenue, said it will add a new office in the southwest city of Chengdu and increase investment in the Chinese market to compete with international rivals such as Hewlett-Packard Corp and IBM Corp.

SGI's decision came after last year's highly publicized unveiling of China's Tianhe-1, which is currently the world's fastest supercomputer.

Tianhe-1 "is a wakeup call around the world to the importance of high-performance computing (HPC)", said Mark Barrenechea, president and CEO of the company.

Compared with western countries, the HPC and cloud-computing industries are still in the early stages of development in China.

While the country has the world's fastest supercomputer, HPCs and cloud computing (the use of the Internet as a computer) have yet to see widespread use.

The US-based research company IDC predicted that the size of the cloud-computing market will be $800 billion for 2011, of which China will account for less than 20 percent despite comprising more than 20 percent of the world's Internet users, according to statistics from the China Internet Network Information Center.

"However, the cloud-computing sector will see a 50 percent growth rate year-on-year over the next three years, faster than any other country in the world," said Kitty Fok, vice-president of IDC Asia-Pacific.

HPC is widely used in many industries - from manufacturing, bioscience, financial institutions and academic research to animation.

As China continues to develop, Barrenechea predicts that eventually "everything in the world will be modeled or simulated on computer, even potato chips".

His company already works with the US potato chip brand Pringles to find the optimal speed of packaging potato chips while preventing them from flying off the production line by running simulations on a high-performance computer.

At present, the company has a research and development center in Shanghai - SGI's only one outside the United States - and a total of about 40 employees in Beijing, Shanghai, Guangzhou and Hong Kong. The company plans to cooperate with a local partner to expand its sales channel and double its own sales and service teams in China.

According to Barrenechea, SGI will purchase about $200 million in computer components from China in the next 12 months, accounting for half of its global purchases.

In anticipation of increased demand, the company is also planning to establish an assembly facility in China, Barrenechea said. However, he did not provide any details regarding when the planned facility will be completed.

SGI had $525 million in global sales revenue in 2010 and expects to achieve annual growth of 22 percent this year.

China Daily

(China Daily 08/30/2011 page16)

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