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Company says the government should groom local manufacturers and depend less on the west

If you are IBM and hope to sell supercomputers to China, you can bet the United States government will not make it easy.

First, you must convince officials back home that the powerful computers will be used for something benign, such as weather forecasting. Then you must station three of your people at the computer's site to make sure the new owners are not running nuclear simulations in the off-hours.

Not surprisingly, the mainland market for supercomputers is under-served and underdeveloped, despite China's ambitions to take its economic development to the next level through greater research and technology investment.

This provides an opportunity for companies such as Galactic Computing, a Shenzhen-based start-up that is targeting the mainland high-performance computing market with its blade server technology.

Galactic is one of a handful of mainland companies - the others are Lenovo Group  and Dawning  - that have built computers ranking among the world's 500 fastest.

'The problem in China now is they never get to use a supercomputer, because there is an embargo from the western world to stop shipping anything bigger than one teraflop,' said Billy Yung, chairman  and chief executive of Shell Electric Manufacturing (Holdings), the Hong Kong-listed company that owns Galactic.

'[Western government officials] worry it might be used for military applications.'

Galactic's GT4000 Supercomputing Blade System in Shenzhen is No100 on the top-500 list. The Dawning 4000A   in Shanghai is ranked No31, while Lenovo has two systems on the list: DeepComp 6800  at No72 and DeepComp 1800  at No403.

But Mr Yung insisted Dawning and Lenovo were not among his company's competitors in the commercial market.

'If you talk about the local market, people always cite these two companies. But in our opinion they are not real competitors. For example, Lenovo is a PC manufacturer. They put together a PC cluster and describe it as a supercomputer, which it is not,' he said. 'Anybody can put a whole bunch of PCs together  ... but they are sort of like a demo unit; they are not really commercial units. They are built to impress the government to get funding.'

He said the Lenovo and Dawning computers were impractical for corporate use. 'They are not user-friendly. In the commercial world, when you have to use it every day, you have huge problems - to program it, to run it, to service it.'

Galactic has yet to find buyers for its high-performance systems, although Mr Yung said talks were ongoing with 15 potential clients.  These are big ticket items - a system typically costs US$1 million per teraflop -  that require a huge time investment to win over customers.

Galactic hoped to find buyers in the oil industry, such as PetroChina  and CNOOC.

'One of the most important applications would be in geology - oil drilling. There's an acute shortage now and oil prices have gone up. So oil companies are spending more money to look for more oil,' Mr Yung said. 'You need supercomputers to analyse the data when you explode the charge to get the echo back and analyse what's under the ground. You need a lot of simulation, a lot of data processing, and our product is perfect for that application.'

Other potential buyers included mainland car manufacturers that might need high-performance systems to analyse crash-test data.

Despite Galactic's home advantage, Mr Yung said deep-pocketed foreign players were better positioned to land government deals.

'They have been doing business in China for 20 years, and they are well connected at different levels,' he said. 'They are taking Chinese officials to tour in the US and Europe every year - 20 or 30 of them, maybe hundreds of them. It is hard to compete when they have that kind of influence.'

Nevertheless, more orders could flow to mainland manufacturers as government officials realised the strategic importance of high-performance computing.

'Eventually, the leaders will realise it is important for the national interest - for national pride - that they need to groom a local manufacturer, rather than depending too much on the western world,' he said.



China supercomputer start-up plays the patriot card