Exhibit 99.1

  News Release

FOR IMMEDIATE RELEASE

SGI REPORTS SECOND QUARTER FINANCIAL RESULTS

MOUNTAIN VIEW, Calif. (January 25, 2005)- Silicon Graphics (NYSE: SGI)today announced results for its second fiscal quarter, which ended December 24, 2004. Revenue for the quarter was $223 million, compared with $175 million for the first quarter ended September 24, 2004. Gross margin was 37.5% in the second quarter, up from 35.9% in the first quarter. SGI's second-quarter operating loss from continuing operations was $9 million, compared with an operating loss of $26 million in the first quarter. The second-quarter net loss from continuing operations was $11 million or $0.04 per share, compared with a net loss of $28 million or $0.11 per share last quarter. GAAP operating expenses for the second quarter were $93 million, compared with $89 million for the first quarter. Non-GAAP operating expenses for the second quarter were $88 million, excluding $5 million recorded as other operating expense. This compares with prior quarter non-GAAP operating expenses of $86 million excluding $3 million in other operating expense. These other operating expenses consisted of primarily charges associated with facilities consolidation. Management believes that a non-GAAP presentation of operating expenses is useful to investors to facilitate period to period comparisons of SGI's operating results. "Altix revenues continue to build during the second quarter as we successfully installed the world's fastest production computer at NASA's Ames Research Center and the world's largest shared memory computer in Japan," said Bob Bishop, chairman and CEO of SGI. "Furthermore, Silicon Graphics Prism has been successfully launched into the visualization market. Nevertheless, we continue to fall short of our profitability objectives and will take steps to lower expenses accordingly." Unrestricted cash, cash equivalents and marketable investments on December 24, 2004 were $106 million. SGI will conduct a conference call today at 2 p.m. PT to provide additional details. The webcast is available at http://www.sgi.com/company_info/investors/events.html. The dial-in number is (888) 208-1824 or (913) 981-5591 for participants outside of North America. An audio replay of this call will be available after 5 p.m. PT today at —more—

1500 Crittenden Lane Mountain View, CA 94043 Telephone 650.960.1980 sgi.com MEDIA CONTACT Caroline Japic caroline@sgi.com 650.933.7210 INVESTOR RELATIONS Beth Howe bhowe@sgi.com 650.933.8279 SGI PR HOTLINE 650.933.7777 SGI PR FACSIMILE 650.933.0283

SGI Reports Second Quarter Financial Results/2

(888) 203-1112 (passcode: 213560) or (719) 457-0820 (passcode: 901189) and will be available for seven days. All links to the archived Webcast and audio replay are available through SGI's Web site at www.sgi.com/company_info/investors/.

This news release contains forward-looking statements relating to future events or expected financial performance that involve risks and uncertainties. The company's future results could differ materially from the expectations discussed herein. Factors that might cause such a difference include risks associated with the timely development, production and acceptance of new products and services; increased competition; dependence on third party partners and suppliers; the failure to achieve expected product mix and revenue levels; failure to manage costs and generate improved operating results; and the ability to improve the financial condition and performance of the company. These and other risks are detailed from time to time in SGI's periodic reports that are filed with the Securities and Exchange Commission, including SGI's quarterly report on Form 10-Q for the quarter ended September 24, 2004. We undertake 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., is the world's leader in high-performance computing, visualization and storage. SGI's vision is to provide technology that enables the most significant scientific and creative breakthroughs of the 21st century. Whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate or enabling the transition from analog to digital broadcasting, SGI is dedicated to addressing the next class of challenges for scientific, engineering and creative users. 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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Silicon Graphics, SGI, Altix, and the SGI logo are registered trademarks and The Source of Innovation and Discovery and Silicon Graphics Prism are trademarks 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.

SILICON GRAPHICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)

	Three Months Ended						Six Months Ended
		Dec. 24, 2004			Dec. 26, 2003 (1)		Dec. 24, 2004			Dec. 26, 2003 (1)
	(unaudited)						(unaudited)
Product and other revenue.	$	117,456		$	125,759		209,591		$	236,080
Product revenue from related party (2)		27,823			7,534		33,674			15,328
Service revenue		77,823			86,233		155,244			170,334
Total revenue.		223,102			219,526		398,509			421,742
Costs and expenses:
Cost of product and other revenue		89,780			77,044		155,565			147,360
Cost of service revenue		49,578			47,350		96,270			98,100
Research and development.		24,823			26,788		48,129			58,747
Selling, general and administrative		62,870			60,137		125,587			129,488
Other operating expense, net (3)		5,199			12,986		8,365			37,223
Total costs and expenses		232,250			224,305		433,916			470,918
Operating loss		(9,148	)		(4,779	)	(35,407	)		(49,176	)
Interest expense		(3,856	)		(5,182	)	(8,992	)		(12,072	)
Interest and other income (expense), net.		132			(29,792	)	(134	)		(30,259	)
Loss from continuing operations before income taxes		(12,872	)		(39,753	)	(44,533	)		(91,507	)
Income tax benefit		(1,723	)		(1,013	)	(5,455	)		(4,042	)
Net loss from continuing operations		(11,149	)		(38,740	)	(39,078	)		(87,465	)
Discontinued operations:
Net income (loss) from discontinued operations, net of
tax.		-			1,372		(276)			2,168
Net loss.	$	(11,149	)	$	(37,368	)	(39,354	)	$	(85,297	)
Net loss per common share - basic and diluted:
Continuing operations	$	(0.04	)	$	(0.18	)	(0.15	)	$	(0.42	)
Discontinued operations		-			0.01		(0.00	)		0.01
Net loss per common share- basic and diluted. .	$	(0.04	)	$	(0.18	)	(0.15	)	$	(0.41	)
Shares used in the calculation of net loss per common
share - basic and diluted.		262,487			211,034		262,263			210,302

(1)	The results of our Alias application software business, which was sold in June 2004, are reflected as discontinued operations for all periods presented.
(2)	Represents product sales to SGI Japan, a related party for which we own a 40% equity interest
(3)	Represents a net charge for estimated restructuring costs and charges associated with the impairment of assets.

SILICON GRAPHICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

		December 24, 2004			June 25, 2004
ASSETS		(unaudited)
Current assets:
Cash and cash equivalents	$	105,491		$	154,855
Short-term marketable investments.		43			2,010
Short-term restricted investments		28,413			23,585
Accounts receivable, net		127,420			113,901
Inventories.		73,066			66,938
Prepaid expenses and other current assets		33,168			34,916
Total current assets		367,601			396,205
Restricted investments		413			909
Net property and equipment		63,062			74,595
Other assets		90,933			98,215
	$	522,009		$	569,924
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	76,853		$	65,119
Accrued compensation		38,948			37,053
Income taxes payable		2,843			6,082
Other current liabilities		90,561			98,467
Current portion of long-term debt.		5,805			17,775
Current portion of deferred revenue		87,286			96,058
Total current liabilities		302,296			320,554
Long-term debt		262,201			264,212
Long-term deferred revenue		41,564			25,749
Other liabilities		77,178			82,087
Total liabilities		683,239			692,602
Total stockholders' deficit		(161,230	)		(122,678	)
	$	522,009		$	569,924