Cloud computing chip startup Ampere Computing is ready to execute on an initial public offering as soon as the market settles, said founder and CEO Renee James.
James, a former Intel president, founded Ampere in 2019.
The fast-growing company submitted confidential paperwork with regulators earlier this year for an IPO, however, the market has changed dramatically amid larger recession worries and unpredictability.
“(An IPO filing) stands ready to roll as soon as the market is ready for IPOs for growth companies,” she said. “Nothing has changed. We’re still on file, we refreshed our filings. We continue to make progress, grow customers, grow revenue, ship more products. We're going to launch some new products. We continue to stay on pace.”
Ampere, unlike its much bigger rivals, strikes an optimistic tone as the five-year-old company is narrowly focused on an area of computing that James sees continuing to grow.
Ampere makes chips aimed at data centers, particularly customers that run hyperscale data centers. These include big cloud infrastructure companies like Microsoft Azure, which is a customer. Just this summer, the company announced a major win with HP Enterprises building a new server line based on Ampere processors. Other customers are Oracle, Tencent, Alibaba and CloudFlare.
The company is based in Santa Clara, Calif., but James lives in Oregon and the company has a growing office in downtown Portland with 200 employees.
Ampere’s big differentiator is that the company's chips are designed from the ground up with these cloud customers in mind. Its chips are general purpose and can run all applications in the cloud whether it's web servers, video encoding or artificial intelligence inference.
Most importantly, its products are designed for high performance and efficient energy use.
“The thesis of this company from day one was, let’s build the platform for what's next,” she said, noting that existing chips are just part of the continuum that started with the first PC chips that were designed for a different generation of software and not the current cloud-based infrastructure.
The company remains on its annual innovation and product cadence. It has three products on the market and shipping to customers. Its next Ampere One 5-nanometer product is sampling with customers and is slated to go into production in the first quarter.
Are we headed to dotcom bust 2.0?
Ampere’s leadership team are industry vets, and as such have learned to always embrace “the known unknown.” In this current economic environment, James said it is rough for tech companies right now. She has been through three Silicon Valley tech busts, but this time her company is in a good position because it is narrowly focused on the still growing cloud sector.
What feels similar to the dotcom bust is the daily, wild swings of the market and reminding oneself not to look at daily trading.
What feels different, and this is specific to her cloud computing sector, is there is no question about the viability of the underlying market. That's a big change from the dynamics at play as the consumer internet was emerging.
“The unabated demand for high performance computing and what people want to do in the cloud … that feels very certain,” she said. “The underlying market dynamic is not in question. During the dotcom bubble and some of the others I’ve been through, you question what is going on in the underlying market.”
A new kind of semiconductor company
In addition to building the next generation of server chip, James is focused on building the next generation of semiconductor engineers and leaders. Her leadership team includes many of her former Intel Corp. (Nasdaq: INTC) colleagues. She has built Ampere to pair these leaders with folks who are just starting their semiconductor careers.
From the outset she wanted to build a different kind of semiconductor company. She noted 30% of the workforce is under the age of 27 and 41% of the leadership team is women. The company has training, specifically leadership training, in place to help employees build careers.
“One of the main missions of why we started the company was to train the next generation. Yea, we’re doing what we think comes next (in terms of how chips are designed) but we’re also training the people who carry it on,” she said. “It’s a very unique business, building high performance microprocessors and we want to make sure that (the company and industry) is healthy and vibrant. I think it’s important to the United States (to have more semiconductor design expertise).”
Importance of domestic manufacturing
Ampere is a fabless semiconductor company, meaning it doesn’t manufacture its chips. It designs them and then works with a foundry for production. Ampere uses Taiwan Semiconductor Manufacturing Co. (NYSE: TSM), which is known in the industry as TSMC.
Ampere will not directly benefit from the recently passed Chips and Science Act, which was largely aimed at companies that do the manufacturing of products like TSMC and Intel. However, James noted that passage of the act and the benefits those companies will receive are important.
“It does give us the possibility of a healthier manufacturing ecosystem,” she said. Ampere’s current manufacturing partner is planning to build a new facility in Arizona and Intel is using the legislation as a major foundation for its recently launch foundry initiatives.
“We are hopeful that there will be diversity of supplier, which we don’t have today,” she said. “Today everything is at TSMC, so on both vectors, having TSMC invest in the United States, I think is super important and I think having the potential of alternatives is also really helpful.”
