Semiconductors

Tilera's Chip for the Cloud Computing Age


It's rare for a semiconductor company to promise a chip that will deliver 10 times the capacity of Intel's (INTC) best. That's the claim Silicon Valley startup Tilera is making about a chip it intends to unveil later this year. Tilera says its design, which will pack 100 microprocessors, or cores, onto a single thumbnail-size piece of silicon, will result in faster, energy-efficient computers capable of performing more tasks simultaneously. Intel's new Xeon chip has 10 cores.

Current chips, says Tilera Chief Executive Officer Omid Tahernia, haven't been able to keep pace with the requirements of giant server farms built by companies such as Google (GOOG) and Facebook. These data centers need to expand to handle growing e-mail, online video, and search traffic. Simply increasing the speed at which a processor handles instructions from software has its limits. That approach generates a lot of heat and requires expensive cooling systems. "Turning up the clock frequency has given us a great couple of decades, but it's run out of juice," says Tahernia, who joined the San Jose company in 2007 after a career at Motorola and Xilinx (XLNX). "For the first time, the semi industry is in the way of progress."

Tilera is creating grids of relatively simple processors on a piece of silicon. They can handle huge numbers of Web requests simultaneously without needing to run so fast that they overheat. The company is targeting the cloud computing market, where the ability to cram thousands of processors has become as important as the high-level data crunching and calculations needed to run, say, an Oracle (ORCL) database.

For next-generation data centers, Tahernia says a single computer with eight Tilera chips will be able to do the work of eight multiple-chip machines using processors from Intel or Advanced Micro Devices (AMD), taking up one-eighth the space and using one-fifth the power. Intel spokeswoman Kari Aakre says the number of processors in a chip isn't the best indicator of quality. "It comes down to system performance, not the number of cores you have in the system," she says. Tilera may have a hard time attracting customers because of the lack of compatible server software needed to use its chips, Aakre says.

Tilera says it has created software tools to let customers switch to its chips. It's now working with the top 20 cloud-computing-center companies, and its chips have been designed into more than 50 computer models, Tahernia says.

"Innovative companies are having to spend tens of millions of dollars to build these data centers and stuffing them full of giant Intel machines, which burn so much power that they spend tens of millions of dollars on electricity," says Rob Chandra, a partner at Bessemer Venture Partners, which led the first venture investment in Tilera six years ago.

Tilera has received more than $100 million in financing since 2005, including $45 million that was raised in January. Its investors include Cisco Systems (CSCO), Samsung Electronics, and Broadcom (BRCM). "They are the real deal," says Hans Mosesmann, a chip analyst at Raymond James & Associates (RJF). "I haven't seen this kind of story for a long time." Getting funded as a chip startup is not an easy sell these days, given that technology investors recently have been favoring social media companies and mobile application developers.

Now, Tilera is squaring off against a company that controls 90 percent of the server chip market. Tahernia is projecting $100 million in annual sales by 2013, 20 percent less than Intel's revenue on an average day in the fourth quarter of 2010. Tilera has 100 employees to Intel's 82,500. "We may be small, but we've solved some tough problems," says Tahernia.

The bottom line: Tilera hopes its energy-efficient chips will give it an opening against Intel in the cloud computing market.

Levy is a reporter for Bloomberg News in San Francisco.
King is a reporter for Bloomberg News in San Francisco.

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