November 14, 2011 / 6:31 PM / 9 years ago

Cray wins $188 million deal to build supercomputer, shares up

(Reuters) - U.S. supercomputer firm Cray won a $188 million contract with the University of Illinois to provide a supercomputer for the Blue Waters project, three months after technology giant IBM pulled out of the venture.

The company’s shares, which have been stagnating since early 2005 when PC technology began catching up with supercomputers, rose more than 10 percent on the news.

The Blue Waters Project requires Cray to deliver a supercomputer capable of sustained performance of 1 petaflop — the ability to do one quadrillion machine operations per second — and is expected to be one of the most powerful computers in the world.

In August, IBM — one of the leading makers of high-end computers — pulled out of the project due to higher-than-expected financial and technical support costs.

For the University of Illinois’ National Center for Supercomputing Applications’ contract, Cray would use processors based on AMD’s Opteron and NVIDIA’s Tesla series of CPUs.

The supercomputer will be installed in phases during the first nine months of 2012 at the university’s National Petascale Computing Facility, Cray said on Monday.

Blue Waters is the second major contract that Cray, which pioneered the design of high performance computers, has won in a month.

In October, Cray had signed a $97 million contract to upgrade the Cray XT5 supercomputer “Jaguar” at the Department of Energy’s Oak Ridge National Laboratory.

For 2012, Cray expects revenue to be in the range of $340-$360 million, including the Blue Waters project that is expected to contribute roughly 40 percent of the annual revenue.

One analyst was expecting 2012 revenue of $320 million, according to Thomson Reuters I/B/E/S.

Gross margin for the year was anticipated to be in the 35 percent range, the company said.

Shares of the company, named after supercomputer designer Seymour Cray , were up 10.09 percent at $6.11 on Monday on Nasdaq.

Reporting by Himank Sharma and Sakthi Prasad in Bangalore; Editing by Dan Lalor, Esha Dey

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