CRAY MAY END UP ON LOSING END OF SUPERCOMPUTER PRICE WAR.

Byline: John Markoff The New York Times

Cray Research Inc. formally opened a trade battle over supercomputers on Monday, charging that the NEC Corp. had unfairly won a federal contract by ``dumping'' its machine on the market at a price below the cost of building it. But unless Cray moves nimbly, it may find itself making the old soldier's mistake of fighting the last war.

Regardless of how sympathetic the U.S. Commerce Department may be to Cray's accusation that NEC, the Japanese computer giant, won a $35 million contract last spring from the National Center for Atmospheric Research by illegal underbidding, Cray will need to demonstrate that its own view of the supercomputer market remains valid.

And that could be a hard case to make in a high-technology industry where the fastest computers are now sometimes among the least expensive.

It is a very different industry from the one that Cray Research helped found nearly two decades ago, when supercomputers were one-of-a-kind machines wrought from custom-built hardware so sensitive they required specially designed cooling equipment. For a specialty company like Cray, a $20 million sale or two to a government weapons laboratory, university or other supercomputer buyer could mean a profitable year - then or now.

In the last decade, though, the high-performance computing world has come to use many of the same components that run inexpensive personal computers and workstations, and new computing technologies now routinely appear first in consumer electronics, not supercomputers. That shift is a trend that has put more than one supercomputer boutique out of business - including Kendall Square Research and Supercomputer Systems in recent years.

Indeed, the trend so hobbled Cray Research that the company, a venerable mainstay of the supercomputing industry, found it necessary to sell itself earlier this year to the workstation maker Silicon Graphics Inc. just to stay in business.

The economics of supercomputing now favor large, diversified technology companies like NEC of Japan - or American behemoths like IBM, which on Friday won a $93 million contract from the Department of Energy to design and build the world's fastest supercomputer.

On Monday, in filing an anti-dumping petition with the Commerce Department and the International Trade Commission, Cray argued that NEC had underpriced its machines by as much as $65 million.

The atmospheric-research contract was the first federal supercomputing contract ever awarded to a Japanese company. And Cray, which has sold about a dozen supercomputers to the Japanese government, said that if NEC's bid prevailed, it would hurt the U.S. industry.

The short-term effect would be a lost sale, Cray argued, and in the long term, prices in the American market would be artificially lowered.

``We've been ultraconservative in making our argument,'' said Earl Joseph, a market analyst at Cray Research who was involved in preparing its complaint.

But NEC officials in the United States said that Cray had made erroneous assumptions in analyzing NEC's actual cost of the supercomputer in question - an NEC SX-4 - and how many machines NEC could expect to sell in recouping its research and development expenses.