aquantia-logo-1q06-jpg-med.jpgAs video bogs down the Internet, it never hurts to beef up the infrastructure for moving packets around. That’s what semiconductor design firm Aquantia is doing with its chips, and it explains why the company has been able to raise $25 million in a new round of venture funding.

Aquantia’s chips can process 10-gigabit Ethernet signals. That’s important because corporate data centers are getting overloaded. The newest servers have multiple processors, or cores, in a single machine. They also handle virtualization, or running more than one operating system on a machine, so they can multitask better. With all of that processing happening in the confined spaces of crowded data centers, the wires feeding data into the machines have to get faster. That’s where the 10GBASE-T chips come in. They can pump more data — at a speed of 10 gigabits a second — through the same wires.

The Milpitas, Calif., company has raised its second round from Pinnacle Ventures, Lightspeed Venture Partners, and Greylock Partners. Bill Woodruff, vice president of marketing and business development at Aquantia, confirmed the deal in an interview.

The company has been developing CMOS silicon chips for the past four years. Rival companies Solarflare Communications and Teranetics already have competing 10GBASE-T chips on the market. But Woodruff contends that his company’s single-chip solution will have better low-power benefits than its rivals. Power consumption matters in such chips because customers need to package them in relatively small spaces.

Silicon chips that can do this job are replacing bulky optical equipment that converts data from light to to electrical signals. Aquantia’s chips enable the server companies to put the Ethernet networking technology into standard network interface cards that plug into servers or storage devices. Woodruff said Aquantia’s chips will enable dual-port 10-gigabit Ethernet NICs and 16-port to 24-port aggregation switches.

“This is targeted at the edge of the data center network,” said Woodruff.

Aquantia previously raised $15 million in funding in 2005 from Lightspeed, Greylock, and Venture Tech Alliance, which is a venture capital firm whose limited partner is the chip foundry Taiwan Semiconductor Manufacturing Co. To date, with the new round, Aquantia has raised a total of $41 million. The company will further describe its products at the end of April at the Interop show in Las Vegas.