We present TeraPart, a memory-efficient multilevel graph partitioning method that is designed to scale to extremely large graphs. In balanced graph partitioning, the goal is to divide the vertices into $k$ blocks with balanced size while cutting as few edges as possible. Due to its NP-hard nature, heuristics are prevalent in this field, with the multilevel framework as the state-of-the-art method. Recent work has seen tremendous progress in speeding up partitioning algorithms through parallelism. The current obstacle in scaling to larger graphs is the high memory usage due to auxiliary data structures and storing the graph itself in memory. In this paper, we present and study several optimizations to significantly reduce their memory footprint. We devise parallel label propagation clustering and graph contraction algorithms that use $O(n)$ auxiliary space instead of $O(np)$, where $p$ is the number of processors. Moreover, we employ an existing compressed graph representation that enables iterating over a neighborhood by on-the-fly decoding at speeds close to the uncompressed graph. Combining these optimizations yields up to a 16-fold reduction in peak memory, while retaining the same solution quality and similar speed. This configuration can partition a graph with one trillion edges in under 8 minutes \emph{on a single machine} using around 900\,GiB of RAM. This is the first work to employ the multilevel framework at this scale, which is vital to achieving low edge cuts. Moreover, our distributed memory implementation handles graphs of up to 16 trillion edges on 128 machines with 256\,GiB each in just under 10 minutes. Finally, we present a version of shared-memory parallel FM local search that uses $O(m)$ space instead of $O(nk)$, reducing peak memory by factor 5.8 on medium-sized graphs without affecting running time.
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