SGI Signals New Era of Aggressive Innovation with Powerful New Server Solutions

New Strategy to Deliver SGI's Most Comprehensive Array of Solutions to More Customers than Ever Before

MOUNTAIN VIEW, Calif. (June 26, 2006)—Silicon Graphics (OTC: SGID) today made a major step forward in its mission to help customers transform raw data into knowledge that can accelerate discovery, engineering, analysis and innovation.

In a series of sweeping product announcements, SGI unveiled an all-new line of cluster solutions based on Dual-Core Intel® Xeon® processor 5100 series, introduced the new SGI® Altix® 450 mid-range blade server based on dual-core Intel® Itanium® 2 processors, and doubled the performance of its acclaimed SGI® Altix® 4700 servers.

The announcements reflect SGI's aggressive new strategy to significantly extend its presence within its existing high-performance computing (HPC) markets, and to introduce coveted SGI solutions to new customers, including enterprise users.

"Now more than ever, SGI is a reliable single source for comprehensive solutions that deliver value at every level of an organization or enterprise," said Dennis McKenna, chairman and CEO of SGI. "The company's core server, supercomputing and storage platforms feature the high-performance architecture needed to solve difficult, data-intensive problems in a broad range of markets, from national laboratories to IT data centers. With today's announcements, SGI is expressly addressing the problems companies, government agencies and researchers have told us they face every day. The bottom line: SGI solutions deliver faster time to results."

SGI Altix XE Transforms Clusters into Integrated Solutions
SGI unveiled SGI® Altix® XE, a new family of Linux® OS-based servers and factory-integrated clusters powered by the new Dual-Core Intel Xeon processor 5100 series introduced today by Intel. Unlike competing systems, SGI Altix XE clusters are custom-configured to optimize leading applications, and are backed by SGI and its decades-long track record of successful customer deployments.

SGI Altix XE servers are driven by a pair of dual-core Intel Xeon processor 5150, packing a total of four processor cores and supporting up to 32GB of memory in each server. Striking the ideal balance between value and 64-bit performance, the new SGI Altix XE systems are the only Intel Xeon processor-based clusters to come with SGI's renowned technical support and vast expertise in data-intensive applications, including those used in life and environmental sciences, media, engineering analysis, and the enterprise. (See "SGI Transforms Clusters into Integrated Solutions with New Altix XE Line Based on Dual-Core Intel Xeon Processor").

SGI also plans to offer application-specific bundles featuring the industry's most popular vertical applications. The first of these is a customized rendering bundle for special effects and game development that incorporates PipelineFX® Qube!™ Render Manager software and a host of connectivity and I/O options. (See "SGI and PipelineFX 'One-Stop' Render Management Solution Accelerates Workflow and Boosts Productivity").

SGI Launches Altix 450 Servers; Doubles Performance of Altix 4700
SGI also announced it will bolster its mid-range offerings with SGI® Altix® 450, a new blade server fueled by next-generation dual-core Intel® Itanium® 2 processors. The new Altix 450 delivers up to 2.5 times the system performance of the current Altix® 350® server at a lower system cost. Altix 450 servers can be configured to maximize density, I/O or memory, or mixed to accommodate any workflow.

Meanwhile, SGI also is equipping its revolutionary SGI® Altix® 4700 blade server line with new dual-core Intel® Itanium® 2 processors. The new Linux® systems will deliver at least double the performance of today's award-winning Altix® servers at no additional system cost to users, while drawing less power and offering more density and flexibility for demanding, data-intensive applications. This lowers the cost of owning SGI systems today and eases concerns about the financial impact of upgrades and expansions in the future. (See "SGI Launches New Mid-Range Altix 450 Servers and Doubles Performance of Altix 4700 Blades").

World's Largest Linux System Image Achieved on Altix 4700
As SGI continues to innovate with new systems to address customer needs at all levels, its long track record for shattering Linux scalability records continues. On its powerful and acclaimed SGI® Altix® 4700 blade platform and a beta version of Novell SUSE® Enterprise Linux Ver. 10, SGI demonstrated a single system image (SSI) running on a world-record 1,024 processors. Until that moment, the largest Linux SSI operated on 512 processors - another SGI record.

The record-breaking Altix 4700 system is now installed in Munich, Germany, at the Leibniz Rechen-Zentrum (LRZ) center. LRZ houses Germany's National Supercomputer System, and the Altix 4700 installation marked the completion of LRZ's Phase I deployment, which incorporates 4,096 Intel Itanium 2 processors, 17TB of global shared memory, and a 660TB SGI InfiniteStorage solution. (See "World's Largest Linux System Image Achieved on SGI Altix 4700 Blade Servers").

SILICON GRAPHICS | The Source of Innovation and Discovery™
SGI, also known as Silicon Graphics, Inc. (OTC: SGID), is a leader in high-performance computing. SGI helps customers solve their computing challenges, whether it's sharing images to aid in brain surgery, designing and manufacturing safer and more efficient cars and airplanes, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. With offices worldwide, the company is headquartered in Mountain View, Calif., and can be found on the Web at www.sgi.com.

Silicon Graphics, SGI, Altix, the SGI cube and the SGI logo are registered trademarks, and The Source of Innovation and Discovery is a trademark of Silicon Graphics, Inc., in the United States and/or other countries worldwide. Linux is a registered trademark of Linus Torvalds in several countries. Intel, Xeon and Itanium are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries. Novell is a registered trademark, and SUSE is a trademark of Novell, Inc. in the United States and other countries. All other trademarks mentioned herein are the property of their respective owners.

This news release contains forward-looking statements regarding SGI technologies and third-party technologies that are subject to risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from those described in such statements. The reader is cautioned not to rely unduly on these forward-looking statements, which are not a guarantee of future or current performance. Such risks and uncertainties include long-term program commitments, the performance of third parties, the sustained performance of current and future products, financing risks, the ability to integrate and support a complex technology solution involving multiple providers and users, and other risks detailed from time to time in the company's most recent SEC reports, including its reports on Form 10-K and Form 10-Q.