Tera Computer Company Receives First Purchase Order for a Tera MTA-16 System; Funding Provided By National Security Agency

Business Wire, Nov 10, 1999

SEATTLE--(BUSINESS WIRE)--Nov. 10, 1999--

Tera Computer Company (Nasdaq NM:TERA) today announced that it has received its first purchase order for a Tera MTA-16 system.

This order represents an upgrade to the existing 8-processor Multithreaded Architecture (MTA) supercomputer now in use at the San Diego Supercomputer Center (SDSC). This upgrade, which doubles the size of SDSC's MTA system from 8 processors and 8 gigabytes of shared memory to 16 processors and 16 gigabytes of shared memory, is specially priced at $2.5 million. Initial purchases of Tera MTA-16 systems are typically priced at $7-10 million, depending upon configuration. Delivery of the SDSC MTA-16 is expected by year-end 1999.

This order follows SDSC's successful evaluation of the MTA-8, which was initially funded by the National Science Foundation and the Defense Advanced Research Projects Agency. Funding for the MTA-16 upgrade is being provided by the National Security Agency (NSA). The MTA-16 system will be used to run computationally demanding applications of interest to users, including medical researchers, graphics experts and computational chemists.

"Tera's multithreaded approach to parallel processing is of great interest not only to SDSC, but also to the entire high-end computing community," said Sid Karin, Director of SDSC. "The performance achieved on our eight-processor MTA supports the argument that hardware multithreading will be the future of high-end computing. By doubling the size of our MTA, we expect to run some applications on it faster than on any other machine at SDSC. We further expect that this will allow us to transition some of our production workload to the MTA."

Jim Rottsolk, President and CEO of Tera Computer concluded, "The sale of an MTA-16 represents another significant milestone in our push toward full-scale commercialization of the MTA technology. The benefits of this transaction go beyond the purchase alone, as we will have access to the SDSC MTA-16 system, and plan to use it to demonstrate high-performance applications of interest to the industrial customer base, such as MSC NASTRAN and LS-DYNA3D. The currently installed base of vector processing supercomputers represents an attractive and timely market opportunity for the Tera MTA-16."

According to the International Data Corporation, there are approximately 200 SGI/Cray Research vector supercomputers installed worldwide, constituting a large portion of the customer base of industrial supercomputing users. With an average selling price of approximately $10 million each, this installed base is valued at $2 billion. Of those 200 systems, about 60 T90s have been installed in the last three years, with the balance of that installed base representing previous generation systems such as the Cray C90.

Tera also announced that its Progress Report: Summer 1999 video is now available on VHS or CD--copies can be requested by visiting the Tera website at www.tera.com. Among those interviewed on this video are Sid Karin, SDSC's Director; Wayne Pfeiffer, SDSC's Deputy Director; Richard Charles, Greg Johnson, and Allan Snavely, three SDSC scientists; and Professor David McQueen, a medical researcher at New York University's Courant Institute.

About Tera Computer Company

Tera Computer Company designs, builds and sells high performance general-purpose parallel computer systems. Tera believes its Multithreaded Architecture system represents the next wave in supercomputer technology because of its unique ability to provide high performance, broad applicability and ease of programming in a single system. For more information about Tera and its MTA systems, contact Tera at 411 First Avenue South, Suite 600, Seattle, WA 98104-2860. Phone: 206/701-2000. Fax: 206/701-2500. E-mail: info@tera.com, or http://www.tera.com.

Safe Harbor Statement

This press release contains forward-looking statements, among other things, Tera's plans to build larger MTA systems and the successful running of key applications on the MTA-16. There are certain factors that could cause Tera's execution plans to differ materially from those anticipated by the statements above. Among such factors are risks associated with building larger MTA systems, necessary modifications to software and hardware systems, timely availability of commercially acceptable components from third party suppliers and successful porting of third party applications. For a discussion of such risks, and other risks that could affect Tera's future performance, please see "Risk Factors" in Tera's most recent SEC Form 10-Q.