The performance of some programs might improve if the compiler has an accurate description of the target computer hardware. When program performance is critical, the proper specification of the target hardware could be very important. This is especially true when running on the newer SPARC processors. However, for most programs and older SPARC processors, the performance gain could be negligible and a generic specification might be sufficient.
The Fortran User's Guide lists all the system names recognized by -xtarget=. For any given system name (for example, ss1000, for SPARCserver 1000), -xtarget expands into a specific combination of -xarch, -xcache, and -xchip that properly matches that system. The optimizer uses these specifications to determine strategies to follow and instructions to generate.
The special setting -xtarget=native enables the optimizer to compile code targeted at the host system (the system doing the compilation). This is obviously useful when compilation and execution are done on the same system. When the execution system is not known, it is desirable to compile for a generic architecture. Therefore, -xtarget=generic is the default, even though it might produce suboptimal performance.