You can split it into tiles and then work with those. But you still have to let it run once. Be sure you have a lot of ram and sufficient disk space when you do this.

Just use the Tiller transformer and Group By Row and Column in the writer.

You can set a search envelope.

From there, you can create 2 processes, one with a grid to create a grid over your AOE that creates bounds coordinates for each grid polygon and a second run with the WorkSpaceRunner that reads the point cloud and sets the envelope based on the grid from the first workbench.

That way you can create X number of smaller subsets to process and bring together in the end.