Astera Labs (ALAB) investor relations material

AI industry trends and company growth

• AI infrastructure is in an early, multi-year build-out phase, with hyperscaler CapEx expected to surpass $1 trillion next year, driving rapid industry expansion.

• The unit of compute has evolved from single boards to entire racks, reflecting the increasing scale and complexity of AI models, now exceeding 10 trillion parameters.

• Demand for compute is outpacing supply, prompting customers to maximize hardware efficiency and fueling innovation in connectivity and memory solutions.

• Revenue has grown from approximately $60 million at IPO to $392 million last quarter, with guidance for $550 million in Q3, driven by new product introductions and increased content per XPU.

• Content per XPU has risen from under $100 to nearly $1,000, with future products targeting multiple thousands of dollars per XPU.

Scorpio product family and competitive positioning

• Scorpio P and X series are purpose-built for AI, with Scorpio P focused on scale-out connectivity and Scorpio X on scale-up, enabling large GPU clusters to function as a single unit.

• Scorpio X, introduced in Q2, is entering volume production in Q3 and is expected to become the largest product family by revenue, overtaking Scorpio P.

• Advanced features like in-network compute and Hypercast in Scorpio X improve GPU efficiency, reducing infrastructure needs for customers.

• Competitive advantage stems from custom AI-focused design, with Scorpio P leading in PCIe Gen 6 volume and Scorpio X offering superior performance per GPU.

• Customer trust and early co-design partnerships have accelerated product qualification and ramp-up, with multi-quarter deployments planned into 2027.

Technology roadmap and market opportunities

• UALink and PCIe are key protocols, with content opportunities expanding significantly when native support is available, especially in scale-up scenarios.

• The company aims to address the full scale-up TAM, including proprietary protocols like NVLink, PCIe, UALink, and Ethernet, leveraging expertise in switching and software.

• Optical connectivity is a major growth area, with initial component sales expected in 2027, followed by NPO and CPO solutions for higher data rates and densities.

• Integration of optical engines and switching platforms will drive content per XPU into the thousands of dollars, with a full solution spanning copper and optical links.

• Custom solutions, such as NVLink Fusion and Leo CXL, represent incremental TAM and are expected to ramp in 2027, supporting diverse customer ecosystems.