Large Contract for Kalray with Public Company for DPU Processor

• Signing of a contract for the development and supply of DPU-based accelerator cards with a Nasdaq listed company.

• The contract includes the technical and financial terms and conditions for a project established in 3 stages and representing a commercial potential of over €100 million in total.

• Confirmation of performance in 2023 before a pre-series commitment;

• This contract validates the relevance of firm’s technology, its ability to sign large contracts and the change in dimension initiated by the company.

Kalray, Inc. signed a major contract with a world leader in the field of high technology, listed on the Nasdaq, in accordance with the negotiations announced recently.

Éric Baissus, CEO, says : “The signing of this contract is a major milestone for Kalray. It is the result of nearly 18 months of in-depth evaluation by our customer of our technology, which has demonstrated its relevance compared to the most advanced alternatives in the industry, the quality of our teams, whom I would like to thank for the remarkable work that was done throughout these discussions, and of our ability, as a strategic partner company to offer the guarantees required to sign a contract of this magnitude with a major international player. This contract is further proof of the change of dimension initiated by our company and a further step towards becoming one of the world leaders in our market.”

Major contract, which confirms company‘s ability to convince market leaders
This major contract was signed with an American company listed on the Nasdaq, a major player in the industry that generated several tens of billions of dollars in revenue in 2021 and had a market capitalization of over $100 billion.

The contract covers the development and supply of acceleration cards based on the firm‘s DPU processors, on which the customer intends to build the next gen of its products and services. This agreement includes technical, commercial and financial terms and represents a commercial potential of several tens of millions of euros/year. The signing of this contract demonstrates the company‘s ability to win over the demanding players in the market and to sign contracts with high revenue-generating potential.

Confirms relevance of technology and business model
The key criterion in the customer’s choice was the ability of the firm‘s technology and its offering of acceleration cards to process the customer’s data with a performance/price and performance/consumption ratio. The tests showed that the company‘s solution was a factor of 3 to 5x better than the competition, representing a potential savings for the customer of several hundreds million dollars over the life of the project. In addition to this cost/performance advantage, the firm‘s solutions can be programmed and can handle a variety of data processing in parallel, which traditional alternatives such as GPUs or FPGAs do not allow.

The company’s ability to support such a large contract comes from its ‘fabless’ business model. Like other high-growth companies like Nvidia, the firm does not have a factory. Instead, the company relies on industry partners such as TSMC (Taiwan Semiconductor Manufacturing Company), a large semiconductor manufacturer, and Wistron Corp., a large card and server manufacturer, to manufacture its hardware solutions without having to invest in a production facility.

Contract in 3 clearly defined stages
The 1st phase began with the signing of the contract and covers the manufacturing of a performance accelerator card including 4xMPPA DPU processors and the support of the customer’s development teams for the development of their next gen product. The customer has already committed $1 million to the company to cover the various phases of this milestone, which is expected to be completed in 2H23.

The 2nd step will be for the customer, once performance is confirmed, to launch pre-series production of its new gen of product, resulting in initial multi-million euro card orders.

The 3rd step will be volume production, which should represent orders of several thousands cards/year, i.e. revenues of several 10 of millions of euros/year, over a period of at least 5 years, which should be starting in 2025.

This signature is in line with the firm’s strategy to work with major players looking for a technology for very large projects. The company is currently in discussions with several players with the same profile and believes that this first major contract should be a catalyst for signing new contracts with this type of first tier customer and with all its prospects in general.