Riding CXL Memory Up In A Down Economy

The jittery economy hasn’t been kind to most semiconductor companies, even those like AMD and Nvidia that are growing in the datacenter. The pain has been mostly felt on the PC side of things, but a curtailing of spending on servers on the part of hyperscalers and enterprises have also dragged down growth rates or, in the case of Intel, caused datacenter revenue to plummet.

Some of that pause in server spending is the economy, and some, we think, is due to customers waiting for a new generation of machines, which always offer better price/performance. AMD’s “Genoa” Epyc 9004 processors and Intel’s “Sapphire Rapids” Xeon SP processors giving us a substantial platform refresh in the coming months with new DDR5, PCI-Express 5.0, and CXL 1.1 features, the server industry has some reason for hope as orders in recent quarters have shriveled some.

As we have written before, CXL, short for Compute Express Link, has the potential to fundamentally shake up the way servers are architected and operated. That is because of the way CXL, a standard developed by Intel that is gaining wide industry acceptance, creates a cache-coherent interface between CPUs, memory, GPUs, and other peripherals. This will, in turn, enable cheaper, more flexible, and larger DRAM configurations as well as memory tiering and pooling, among other things.

One of the companies seeking to enable these CXL capabilities is Astera Labs, a Santa Clara startup that has begun sampling with OEMs and cloud builders a batch of technologies that will enable DRAM to be directly attached to a PCI-Express slot. This consists of Astera’s Leo E-series memory controller that enables memory expansion, the Leo P-series memory controller that enables CXL 2.0 capabilities such as memory pooling, and the Aurora PCI-Express memory expansion cards that feature four DDR5 slots for cloud customers who don’t want to use custom hardware.

Our sister publication The Register pointed out recently that these trying times have not been friendly to some venture-backed semiconductor companies, like Mythic, the analog AI chip designer that has run out of investor money, and Graphcore, which has slashed jobs due to financial woes.

Astera, too, has felt the impact of a changing economy. The startup was originally planning to go public through an IPO by the end of the year, but 2022 hasn’t been a great year for companies wanting to do that. One may think that would hurt the trajectory for a company like Astera, which wants to tap into the public market to continue expanding. But instead, venture capital firms apparently see so much potential in Astera that they decided to back the startup in a new $150 million Series D round, announced today, that increased its valuation to nearly $3.2 billion. That’s impressive, considering the number of “down rounds” seen this year that have toppled the high valuations of several startups.

The CXL enabler is potentially bucking trends another way. While other companies are laying off employees and looking to cut costs by other means, Astera has opened new research and design centers in Vancouver and Toronto, with more two dozen positions listed across the world.

This momentum, which includes support from Intel and AMD, paints a positive picture of where Astera is headed. But with CXL hitting the market in the coming months thanks to the arrival of the Sapphire Rapids and Genoa, Astera’s commercialization story has only just begun, so we will, as always, keep an eye on this space and report back as the startup’s CXL tech makes its way into datacenters.

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