Cray Inc. Wins Order for Two Supercomputers for U.S. Army Space and Missile Defense Command

SMDC and Cray Will Collaborate on Higher-Resolution Results for Aerodynamics and Other CFD Applications

SEATTLE, WA -- (MARKET WIRE) -- 06/30/2005 -- Global supercomputer leader Cray Inc. (NASDAQ: CRAY) today announced that it has received an order for a Cray X1E™ system upgrade and a Cray XD1™ supercomputer system from Madison Research Corporation for the U.S. Army Space and Missile Defense Command (SMDC).

SMDC will use the Cray supercomputers to run computational fluid dynamics (CFD) codes to generate aerodynamics models for a wide range of missile configurations, and to simulate phenomena such as jet and shock interactions, combustion modeling, and propulsion flow. SMDC selected the Cray systems for their ability to run larger, more complex simulations and produce higher-resolution results.

"We are excited that SMDC is expanding their long-term relationship with Cray. SMDC is giving its researchers access to Cray's latest vector supercomputer technology and, with the purchase of the Cray XD1 system, is also turning to Cray for the first time for a microprocessor-based system," said Cray President Peter Ungaro.

The Cray X1E upgrade with 32 multistreaming vector processors is scheduled to be installed this month at SMDC's Simulation Center in Huntsville, AL, where it will be used to support SMDC's global missions. A 1.27-teraflop Cray XD1 system with 144 Dual-Core AMD Opteron™ processors will be installed in the same facility later this summer. Madison Research Corporation is the prime contractor that operates SMDC's Simulation Center. Funding is through the U.S. Department of Defense's High Performance Computing Modernization Program.

About Madison Research Corporation

MRC is a full-service engineering services and information technology company founded in 1986. John L. Stallworth, President and CEO, directs MRC's operations from the corporate headquarters in Huntsville, AL. Our current staff of over 650 people is located in Huntsville, at six satellite offices throughout the South, and on-site at 29 Government facilities nation-wide. MRC applies its core competencies of systems acquisition, system sustainment, software engineering, and information systems to meet the diverse needs of a growing customer base of Government agencies (DoD, NASA, DOE, the States of Alabama and Tennessee, EPA, and the US Department of Health and Human Services) and leading commercial companies. For more information, visit the MRC web site at http://www.madisonresearch.com/.

About the Space and Missile Defense Command

SMDC, as the Army Service Component to USSTRATCOM, conducts space operations and provides planning, integration, control and coordination of Army forces and capabilities in support of USSTRATCOM missions; serves as proponent for space and ground-based midcourse defense and as Army operational integrator for global missile defense; conducts mission related research, development, and acquisition in support of Army Title 10 responsibilities and serves as the focal point for desired characteristics and capabilities in support of USSTRATCOM missions.

About Cray Inc.

As the global leader in high performance computing (HPC), Cray provides innovative supercomputing systems that enable scientists and engineers in government, industry and academia to meet both existing and future computational challenges. Building on years of experience in designing, developing, marketing and servicing the world's most advanced supercomputers, Cray offers a comprehensive portfolio of HPC systems that deliver unrivaled sustained performance on a wide range of applications. Go to http://www.cray.com/ for more information.

Safe Harbor Statement

This press release contains forward-looking statements. There are certain factors that could cause Cray's execution plans to differ materially from those anticipated by the statements above. These include the technical challenges of developing high-performance computing systems, government support and timing of supercomputer system purchases, the successful porting of application programs to Cray computer systems, reliance on third-party suppliers, fluctuating quarterly operating results, lower margins and earnings due to significant pricing pressure, Cray's ability to keep up with rapid technological change, Cray's ability to compete against larger, more established companies and innovative competitors, and general economic and market conditions. For a discussion of these and other risks, see "Factors That Could Affect Future Results" in Cray's most recent Quarterly Report on Form 10-Q filed with the SEC.

Cray is a registered trademark, and Cray X1E and Cray XD1 are trademarks, of Cray Inc. All other trademarks are the property of their respective owners.

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