First Union Corp. is beefing up its mainframe computers.

The Charlotte, N.C.-based bank holding company is installing four high- capacity processors from Amdahl Corp., a Sunnyvale, Calif.-based supplier of large-scale computing products.

Though many banks, including First Union, have been moving applications to personal computers, most large institutions will continue to rely heavily on mainframes through the year 2000, experts said. First Union's planned upgrades are evidence of this.

First Union officials would not say how much the upgrade cost, but said the Amdahl processors will help the bank avoid adding a new mainframe in the next few years. Installing the new processors also will mean the bank will not need more data centers to handle its growing processing volume.

The need for more processing power has been generated by the bank's rapid expansion. In the last 10 years, First Union has acquired more than 50 institutions, growing its assets from about $7 billion in 1985 to $77.3 billion today. Its network of 1,330 branches ranks as the nation's third largest.

Installation of the new processors - which will be placed at the bank's data centers in Charlotte and Jacksonville, Fla. - will be completed by mid-March.

The banking industry in general continues to have an appetite for more powerful mainframe processing, experts note.

Although mainframe sales are slowly declining - the growth in new hardware spending is mostly in microcomputers - upgrades to the large-scale systems are still common.

Mainframe processing power, measured in "MIPS," for millions of instructions per second, is growing 22% a year in the banking industry, according to the 1994 Ernst & Young Technology in Banking survey.

Though First Union is investing a significant amount on client-server technology - based on PCs - a large demand for mainframe processing capacity still exists for transaction-intensive functions, according to Carter Pittman, director of the bank's system operations division.

Mr. Pittman said he believes the mainframe's role in the bank will evolve rather than decline into allowing two technology environments - large-scale computing and client-server - to complement each other.

At First Union, mainframes act as large servers, housing information on deposit accounts and customers, while client-server technology is used for more specialized tasks, such as customer service and commercial lending.

The use of mainframes as large data repositories that feed information to client-server applications is a trend in the banking industry, experts said.

First Union's upgrade, which includes three 5995-10670M ten-way multiprocessors, and one 5995-5570M processor, will allow the bank to distribute work loads between its data centers in North Carolina and Florida. Balancing the work load will enable the bank to get maximum efficiency from its mainframes, said Mr. Pittman.

First Union has been an Amdahl customer since 1990. The bank previously used an older line of Amdahl mainframes, which were recently upgraded to current models.

When installation of the new processors is complete, the bank will have two mainframes in Charlotte, each running 10 processors, and one mainframe in Jackson running 10 processors. The bank also has a mainframe from International Business Machines Corp., which runs five processors.

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