I am building a serverless application using AWS Lambda and DynamoDB. The application processes a large amount of incoming data, performs some transformations, and then stores the results back into DynamoDB. However, I am encountering issues with Lambda function timeouts and scalability as the data volume increases. Specifically, the Lambda functions often exceed the maximum execution time, and the DynamoDB read/write capacity units are sometimes insufficient to handle the load.

I tried increasing the memory allocation for the Lambda functions and optimizing the code to reduce execution time, but this only provided a marginal improvement. I also set up DynamoDB Auto Scaling, but it still struggles to keep up with sudden spikes in traffic. I expected the Lambda functions to complete within their time limits and DynamoDB to scale automatically to handle the increased load.