Israel (May 15, 2006)—The MALAM Group, one of the largest and most prominent IT groups in Israel and Silicon Graphics, Inc. (OTC: SGID) signed a strategic partnership agreement to deliver industry-leading business solutions for the enterprise market.

Pursuant to the agreement, the MALAM Group will market SGI® products as a part of the company's comprehensive information technology solutions. The SGI product line includes The SGI® Altix® family of Linux® servers as well as SGI® InfiniteStorage systems that provide customers with high availability solutions for demanding large database challenges, SAP applications, advanced data warehouse sets and virtualization solutions on an open-standards-based Linux® 64-bit platform powered by industry-leading Intel® Itanium® 2 processors.

The MALAM Group will also provide support and service at the customers' premises for SGI solutions, which are characterized by an open, stable and standard platform, with infinite scalability and flexibility in its ability to adapt the server architecture to the company's exclusive requirements.

Gilad Rabinovich, CEO of the MALAM Group said, "The partnership with SGI will enable MALAM to supply our customers with business data solutions and services, based on SGI's advanced 64-bit Linux servers which are offering the best cost performance ratio and TCO (total cost of ownership) in the IT market for applications which require the power of computerization as well as a fast, quality and reliable technology solution for achieving business goals."

Shabtai Shaanani, CEO, SGI Israel, "Having selected MALAM Group as a strategic partner of SGI is an important step in the our strategy to bring advanced high-performance technology to the enterprise market, enabling customers to immediately address business opportunities, while maximising the utilisation of previous investments made in Linux infrastructure. The architecture on which our Linux servers are based affords customers simpler development and management of resources, richer applicability and promises a lower TCO. SGI technology also opens new business opportunities to its business partners in existing markets and enables them to increase the scope of their business in new areas and markets."

About MALAM Group
The MALAM Group, one of Israel's major IT groups, provides end-to-end Information Technology (IT) solutions to hundreds of customers in all sectors of the economy, adhering to international standards of quality and professionalism. MALAM's unique integrated solutions are implemented on all major hardware, software and communication platforms http://www.malam.com

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, finding oil more efficiently, studying global climate change, 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 and Itanium are trademarks or registered trademarks of Intel Corporation or its subsidiaries 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 relating to future events or expected financial performance that involve risks and uncertainties. Factors that might cause such a difference include, but are not limited to: the effects of our chapter 11 filing; our ability to maintain adequate liquidity; and our ability to obtain and maintain normal terms with customers, suppliers and service providers. These and other risks are or will be detailed from time to time in SGI's periodic reports that are filed with the Securities and Exchange Commission, including the report on Form 10K and 10-Q. Silicon Graphics is under no obligation to publicly update or revise any forward-looking statements, whether changes occur as a result of new information, future events or otherwise.