Microserver Chip Maker Calxeda Abruptly Shutters


Calxeda will stop making chips based on the ARM architecture and close its doors, laying off the majority of its 130 employee workforce, the Austin, Texas-based microprocessor pioneer said Thursday. The company that raised $90million in venture funding and whose chips were slated to be used in an upcoming server module for Hewlett-Packard's Moonshot server line said the abrupt closure was a result of a financing deal that fell through.

"Carrying the load of industry pioneer has exceeded our ability to continue to operate as we had envisioned," said Barry Evans, Calxeda's CEO and founder, and Karl Freund, its vice president of marketing, in a prepared statement.

The company had announced plans to introduce a 64-bit ARM module, code-named Sarita, in 2014. Freund said on Thursday most of its employees would be laid off with the exception of a handful that would be kept on to support existing customers. The abrupt closure, according to Freund, came as a direct result of a financing that failed to materialize.

[Related: HP Preps Moonshot For New Calxeda ARM Technology]

"We wanted to let you know that Calxeda has begun a restructuring process. During this process, we remain committed to our customer's success with ECX-2000 projects that are now underway," read the statement attributed to Evans and Freund.

The company had positioned its ARM processor-based technology as an option to Intel's Atom-based technology.

Calxeda's EnergyCore ECX-2000 ARM modules run at up to 1.8GHz and were aimed at the nascent microserver market of system builders. Microservers are servers that use multiple mobile low-power processors and take up less space, allowing companies to fit more nodes into a single data farm -- thereby reducing cooling costs.

When HP first unveiled its Moonshot server plans, the original Calxeda ARM processor technology was used to build a development lab to give customers a chance to test the technology. The initial plan was not for HP to ship server modules based on the original Calxeda ARM server-on-chip modules, but HP ended selling it in limited quantities per customer request.

According to market researchers at MarketsandMarkets, microservers now account for 2.3 percent of the market. However, in the next five years they are expected to reach 25 percent to 30 percent of the global server market, worth an estimated $26.5 billion by 2018, according to the research firm.

PUBLISHED DEC. 19, 2013