Preliminary dump rulings go against NEC, Fujitsu

Electronic News, April 7, 1997 by Sarah Cohen

Last May, competitors Cray Research, NEC and Fujitsu bid on a $35.25 million contract to provide supercomputers to the National Center for Atmospheric Research (NCAR) in Boulder, Colo. The NCAR chose four 32-processor SX-4 supercomputers from NEC over offerings from Cray Research and Fujitsu.

Subsequently, Cray filed an anti-dumping petition with the Department of Commerce and the International Trade Commission, stifling the deployment of what would have been the first Japanese supercomputer sale to a department of the U.S. government (EN, Aug. 5, 1996).

If the Commerce Department upholds last week's ruling and decides there's been injury to the supercomputing industry, the country of Japan is considered guilty, affecting NEC, Fujitsu and Hitachi. NEC faces penalties of 454 percent of the price of any system sold, Fujitsu faces a penalty of 27 percent and other Japanese companies, such as Hitachi, face a 27 percent penalty.

The Commerce Department figures were based on information supplied by Cray's cost analysis group. NEC declined to offer its own figures to the commerce department claiming that Cray and the U.S. government concluded in a predecisional dumping analysis memorandum, before any figures were disclosed, that NEC was guilty of dumping.

Samuel W. Adams, VP of sales and marketing for HNSX Supercomputers Inc., a U.S. subsidiary of NEC, stated, "We don't believe the Department of Commerce represents a forum in which we can get a fair hearing...Cray and the Department of Commerce want to keep Japanese supercomputers out of the U.S. marketplace, while Cray enjoys success in the Japanese market and around the world." Mr. Adams believes the ITC hearing, scheduled to begin this week, might offer a more level playing field.

Cray's director of competitive analysis, Earl Joseph, noted that if NEC had, for instance, declared that the 454 percent penalty was excessive, NEC might have produced evidence detrimental to its case. Mr. Joseph remarked, "Let's say we were off quite a bit--even a 200 percent penalty is very large--if NEC had produced evidence that the penalty ought to be brought down, NEC would be admitting its guilt."

Mr. Smith said the NCAR chose NEC systems because "Cray proposed an older model at a higher price. We offered newer technology at a lower price, similar to prices of Cray's for similar technology," referring to the differences in CMOS-based, massively parallel supercomputers, such as found in NEC's SX-4, and older technologies, such as vector processors based on ECL circuits.