Evans & Sutherland Computer Corp. said Wednesday it has decided to stop development on its ES-1 supercomputer, a venture it launched in 1986 and has since invested $30 million.
Susan Mickelsen, vice president of corporate relations at Evans & Sutherland, said an attempt will be made to find a buyer or partner for its Computer Division based in Mountain View, Calif. If not, the division will be closed and its 150 employees terminated."We've been very bullish on the whole development but it has gotten expensive and somewhat late," Mickelsen told the Deseret News. "It became apparent that we were facing considerable effort before it could come to market in production form."
She said the company still believes its technology on the ES-1 is sound, but she said the board of directors determined it is not fair to the corporation or its shareholders to continue spending at such high levels.
"We've poured $30 million into it to date and the spending rate was getting close to a million, million-and-a-half a month and it was still a long way out," said Mickelsen, noting that the company was facing another period of heavy investment before any revenues would be produced from the product.
"I think the board just decided the drain was too heavy for us to maintain," she said.
Mickelsen said "contacts are being made" regarding a possible sale or joint venture on the technology developed so far. If those are not successful, the division will be closed.
Evans & Sutherland's stock, which is traded on the NASDAQ system, initially reacted positively to the news that the company would drop the supercomputer project and the drain on earnings it has represented. The stock opened nearly four points higher Wednesday and at press time was still up 2.5 points from Tuesday's close.
Mickelsen said the decision to stop supercomputer development will mean some changes in reporting procedures but otherwise will not affect the company's other revenue-producing units, including its graphics and simulations divisions based at the University of Utah Research Park in Salt Lake City.
"Those operate pretty much independently," said Mickelsen, but she conceded that the announcement "is a big step backward in what we wanted to achieve in supercomputers."
E&S Chairman David C. Evans was in Mountain View on Wednesday and not available for comment. Mickelsen said she didn't know if Computer Division President Jean-Yves Leclerc will stay with the company.