SGI Files Plan of Reorganization

Receives Court Approval of Real Estate Transactions

MOUNTAIN VIEW, Calif. (June 16, 2006)—Silicon Graphics (OTC: SGIDE) reached an important milestone in its restructuring efforts by filing its Joint Plan of Reorganization. SGI plans to file its Disclosure Statement by June 30.

The Company also announced that the Court overseeing its restructuring has approved the terms of its settlement with Goldman Sachs to reduce and ultimately eliminate its lease obligations at Amphitheatre Technology Center (ATC) and the Crittenden Technology Center (CTC) in Mountain View. When combined with the new financing facility announced last week, the settlement with Goldman Sachs provides approximately $19 million of additional liquidity for the Company and reduces its facilities-related cash obligations by $15-20 million annually beginning in July.

“Our restructuring process is quickly moving along as planned and we are anxious for all interested parties to understand the details of our plan as soon as possible. We are pleased with the Court approvals. The real estate settlement will provide significant cash flow relief for the Company,” said Dennis McKenna, chairman and CEO, SGI. “Today’s announcements are significant achievements and are in keeping with our aggressive agenda for returning the company to growth and profitability.”

More information about SGI’s reorganization is available on the Internet at www.sgi.com/reorg.

Forward-Looking Statements
This news release contains forward-looking statements relating to future events or expected financial performance that involve risks and uncertainties. Factors that might cause such a difference include, but are not limited to: the effects of our chapter 11 filing; our ability to maintain adequate liquidity; and our ability to obtain and maintain normal terms with customers, suppliers and service providers. These and other risks are or will be detailed from time to time in SGI’s periodic reports that are filed with the Securities and Exchange Commission, including the Form 8K filed on May 8, 2006, the form 8K filed in conjunction with this announcement and SGI’s quarterly report on Form 10-Q for the quarter ended December 30, 2005. Silicon Graphics is under no obligation to publicly update or revise any forward-looking statements, whether changes occur as a result of new information, future events or otherwise.

SILICON GRAPHICS | The Source of Innovation and Discovery™
SGI, also known as Silicon Graphics, Inc. (OTC: SGIDE), is a leader in high-performance computing. SGI helps customers solve their computing challenges, whether it’s sharing images to aid in brain surgery, designing and manufacturing safer and more efficient cars and airplanes, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. With offices worldwide, the company is headquartered in Mountain View, Calif., and can be found on the Web at www.sgi.com.

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Contact Information

Lisa Pistacchio

Corporate, Product and Media PR

Silicon Graphics, Inc.

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