Silicon Graphics seeks bankruptcy protection

The high-performance computing specialist will today reveal its plan for recovery

Silicon Graphics (SGI) has filed for Chapter 11 bankruptcy protection in the US but said it plans to emerge from the process within six months.

SGI was once a high-flyer in scientific computing, cinema special effects and other high-end tasks via its workstation and server business that used Mips processors and the Irix variant of Unix.

However, the firm has had financial struggles for several years as rivals have eroded its areas of differentiation. Most recently the firm has been attempting to develop a business selling systems based on Intel’s Itanium processor running Linux.

SGI has suffered a series of traumas recently with senior managers leaving the company, a reduction in its financial earnings outlook, a delisting from the stock markets and Intel delaying the release of a dual-core Itanium.

Today’s reorganisation announcement will see SGI refocus its product strategy and make sharp cuts to its expenses.

"We want to assure our customers, our employees and our communities that SGI is operating - business as usual," Dennis McKenna, SGI’s chief executive. "Our customers can continue to rely on SGI for its mission-critical products, services, and support."