SGI and MIPS Technologies Announce Spin-Off of MIPS Shares

May 17, 2000, 01:00 ET from SGI

    MOUNTAIN VIEW, Calif., May 17 /PRNewswire/ -- SGI (NYSE:   SGI) and its
 subsidiary MIPS Technologies, Inc. (Nasdaq:   MIPS) today announced a plan for
 SGI to spin off to its shareholders its approximately 65% interest in MIPS
 Technologies, Inc. The spinoff will be in the form of a dividend with a record
 date of June 6, 2000, with the distribution expected to occur on June 20,
 2000. This distribution is consistent with SGI's intention, which was stated
 in 1999, to divest all of its shares of MIPS Technologies, Inc.
     Under the spin-off, SGI will distribute to its shareholders as a dividend
 all of its 25,069,759 shares of Class B Common Stock of MIPS. Based on SGI's
 outstanding shares at March 31, 2000, each share of SGI stock would receive
 0.135 of a Class B MIPS share. The actual distribution ratio will be
 determined based upon the number of shares outstanding as of the record date
 for the dividend. The Class B MIPS shares will be listed on Nasdaq separately
 from the Class A MIPS shares that are currently traded on Nasdaq. The Class A
 and Class B shares have substantially identical rights except that the Class B
 shares are entitled to elect 80% of MIPS Technologies' board of directors.
     SGI believes, based on an opinion of counsel, that the distribution should
 be tax-free for U.S. federal income tax purposes to SGI and its shareholders.
     "We are delighted to deliver value to SGI's shareholders through this
 action," said Robert R. Bishop, chairman and chief executive officer, SGI. "We
 established MIPS Technologies as an independent, publicly held entity in 1998
 in order to build on its leadership position in the market for embedded
 microprocessors and related intellectual property for digital consumer
 products. The spin-off will give SGI shareholders the ability to participate
 directly in MIPS Technologies' future growth."
     "MIPS Technologies and its shareholders should gain significant benefits
 from the completion of the SGI divestiture," said John Bourgoin, chairman and
 CEO of MIPS Technologies. "The nearly tripling of shares available for trading
 should make it possible for investors seeking larger positions to reach their
 objectives without excessive impact on stock prices. MIPS Technologies will
 have increased flexibility in its strategic alternatives."
     In connection with the spin-off, SGI expects to take a noncash charge in
 the quarter ending June 30, 2000 reflecting a substantial portion of the
 approximately $485 million in deferred tax assets that the company had
 recorded as of March 31, 2000. The charge reflects a reduction in the carrying
 value of deferred tax assets, including net operating loss carryforwards, tax
 credits and assets related to timing differences. These assets would have been
 used to offset tax consequences had the divestiture created a tax liability.
 SGI has determined that a writedown is appropriate since the spin-off should
 be tax-free. The writedown in carrying value will not, however, affect SGI's
 ability to use these assets in the future as it generates taxable income. The
 final determination of the writedown will be made after the completion of the
 fiscal year on June 30, 2000.
     About SGI
     SGI provides a broad range of high-performance computing and advanced
 graphics solutions that enable customers to understand and conquer their
 toughest computing problems. Headquartered in Mountain View, Calif., with
 offices worldwide, the company is located on the Web at
     About MIPS Technologies, Inc.
     MIPS Technologies, Inc. is one of the world's primary architects of
 embedded 32- and 64-bit RISC processors.  The company drives the broadest
 architectural alliance that is delivering 32- and 64-bit embedded RISC
 solutions.  The company licenses its intellectual property to semiconductor
 companies, ASIC developers, and system OEMs.  MIPS Technologies, Inc. and its
 licensees offer the widest range of robust, scalable processors in standard,
 custom, semi-custom and application-specific products.
     Licensees currently include Alchemy Semiconductor, Inc.; ATI Technologies,
 Inc.; Broadcom Corporation; Centillium Communications, Inc.; Chartered
 Semiconductor Manufacturing; CommQuest (IBM); ESS Technology, Inc.; Excess
 Bandwidth; General Instrument Corporation; Integrated Device Technology, Inc.
 (IDT); Lara Networks, Inc.; LSI Logic Corporation; Macronix; Metalink Ltd.;
 NEC Corporation; NKK Corporation; Philips Semiconductors; Quantum Effect
 Devices, Inc. (QED); QuickLogic Corporation, Sandcraft, Inc.; SiByte, Inc.;
 Sony Corporation; Synova; Texas Instruments Inc.; Toshiba Corporation; and
 Taiwan Semiconductor Manufacturing Company (TSMC). Numerous companies utilize
 MIPS(R) technology-based intellectual property. MIPS Technologies, Inc. is
 based in Mountain View, California, and can be reached at 650-567-5000 or
     This press release may contain forward-looking statements regarding future
 events or the future financial performance of MIPS Technologies, Inc. Actual
 events or results may differ materially. Many important factors could cause
 the actual results to differ materially from those contained in such
 forward-looking statements, including but not limited to the risks that
 products will fail to achieve market acceptance, the timing of customer
 orders, delays in the design process, the length of MIPS Technologies' sales
 cycle, MIPS Technologies' ability to develop, introduce and market new
 products and product enhancements, the timing of new product announcements and
 introductions by MIPS Technologies and its licensees and their competitors,
 the demand for semiconductors and end-user products that incorporate
 semiconductors and other risks. With respect to MIPS Technologies, Inc., the
 Company refers the reader to the documents that it files from time to time
 with the Securities and Exchange Commission, including its Annual Report on
 Form 10-K for the year ended June 30, 1999 and Form 10-Q for the quarters
 ended September 30, 1999, December 31, 1999, and March 31, 2000.