SGI Files Plan of Reorganization and Disclosure Statement

Consensual Plan Supported by Creditor Committees

MOUNTAIN VIEW, Calif. (July 5, 2006)—Silicon Graphics (OTC: SGID) announced today that it has filed an amended plan of reorganization (the “Plan”) and disclosure statement. The plan, which is subject to confirmation by the Court, reflects the global settlement agreement entered into with the Official Creditors’ Committee, an Ad Hoc Committee of Senior Secured Noteholders and the largest holder of Silicon Graphics’ Unsecured Debentures. With the support of its major creditor constituencies, SGI continues to move expeditiously towards emergence from Chapter 11 in September 2006.

Under the Plan, Silicon Graphics will emerge a public company with a new credit facility and its total debt reduced from $345 million to $70 million. The Company’s notes and debentures will be extinguished in exchange for the new common stock and cash, respectively, and rights to invest $50 million in additional shares of the reorganized company. As previously announced, certain Senior Secured Noteholders will purchase any common stock which remains unpurchased in the rights offering. All of SGI’s new common stock will be owned by SGI’s current noteholders, debentureholders, and management, pursuant to a management incentive program. SGI’s current shareholders will receive no recovery under the plan.

“We are pleased with the progress the company is making and the likelihood of an exit by the end of September,” said Dennis McKenna, chairman and CEO. “With the financial re-engineering process nearing completion, the company is working in parallel on its operational initiatives to improve performance. We look forward to focusing 100 percent of our efforts on executing our new strategies.”

The hearing to approve the Disclosure Statement is scheduled for July 27th, and following its approval, SGI will begin soliciting creditors on its Plan of Reorganization.

More information about SGI’s reorganization, including the Disclosure Statement and Plan of Reorganization documents, is available at www.sgi.com/reorg. The documents are also available via the court’s website at www.nysb.uscourts.gov. Please note that a PACER password is required to access the documents via the court’s website.

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 July 3, 2006 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: SGID), 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.

Silicon Graphics, SGI, the SGI cube and the SGI logo are registered trademarks and The Source of Innovation and Discovery is a trademark of Silicon Graphics, Inc., in the United States and/or other countries worldwide. All other trademarks mentioned herein are the property of their respective owners.

Contact Information

Lisa Pistacchio

Corporate, Product and Media PR

Silicon Graphics, Inc.

Contact via E-mail