Instruction Set Extensions (ISEs) can be used effectively to accelerate the performance of embedded processors. The critical, and difficult task of ISE selection is often performed manually by designers. A few automatic methods for ISE generation have shown good capabilities, but are still limited in the handling of memory accesses, and so they fail to directly address the memory wall problem.We present here the first ISE identification technique that can automatically identify state-holding Application-specific Functional Units (AFUs) comprehensively, thus being able to eliminate a large portion of memory traffic from cache and main memory. Our cycle-accurate results obtained by the SimpleScalar simulator show that the identified AFUs with architecturally visible storage gain significantly more than previous techniques, and achieve an average speedup of 2.8× over pure software execution. Moreover, the number of required memory-access instructions is reduced by two thirds on average, suggesting corresponding benefits on energy consumption.