December 3, 2022

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3.7 billion dollar lost: Intel shuts down Optane memory business

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3.7 billion dollar lost: Intel shuts down Optane memory business



 

3.7 billion dollar lost: Intel shuts down Optane memory business.


News on September 29, according to reports, Intel has informed Optane memory business department employees to stop related business more than a month ago, there will be no new products in the future, and no more production will be produced after the inventory is processed.

The Optane brand will become history.

 

3.7 billion dollar lost: Intel shuts down Optane memory business

 

 

Relevant people emphasized that although Intel disclosed that it would close the Optane business before, it has not officially announced it to the public.

The current strategy is to officially announce the end when the existing products are sold out.

 

Intel’s Optane memory products are derived from 3D Xpoint technology co-developed by Intel and Micron.

In 2006, Intel and Micron each invested 1.2 billion US dollars to establish a joint venture (IM Flash Technologies) to develop 3D XPoint technology, and first announced the results of their cooperation in 2015.

 

This technology has high-speed access performance similar to DRAM, but also has non-volatility similar to SSD, which can store data even in the event of a power failure, and the cost is lower than that of DRAM,

In 2017, Intel officially launched the Optane series products based on 3D XPoint technology.

 

Thanks to the advantages of Optane persistent memory, larger datasets can be stored closer to the CPU for faster processing and better performance.

This also enables higher capacity Intel Optane persistent memory to create a more affordable solution, thereby accelerating the industry-wide trend towards real-time data processing.

 

Paired with Intel’s Xeon Scalable processors, data processing is further accelerated, resulting in significantly improved performance for large, memory-constrained workloads.

At present, Intel Optane DC persistent memory and solid-state disks have been applied to storage, cloud computing, database, AI/analytics, high-performance computing, and communications.

 

In 2018, Intel and Micron announced that they would end their cooperation after completing the development of the second-generation 3D Xpoint technology in the first half of 2019.

Micron also bought out the IM Flash factory, a joint venture with Intel, for $1.5 billion.

 

While Intel can continue to use 3D XPoint technology in the Optane product line, it is dependent on supply from the IM Flash factory acquired by Micron. Micron’s supply to Intel will end at the end of 2021 under the later extended supply agreement.

It was reported at the time that Intel was planning to upgrade its Rio Rancho fab in New Mexico, where it will produce 3D XPoint flash memory chips for its Optane product line.

There were also rumors at the time that Intel would produce Optane products at its flash memory factory in Qingdao, China.

 

However, on October 20, 2020, SK hynix and Intel jointly announced the signing of an acquisition agreement in South Korea.

According to the agreement, SK hynix will acquire Intel’s NAND SSD business, NAND components and wafer business for US$9 billion, including Intel’s NAND flash memory manufacturing facility in Dalian, China. This also makes Intel lose its only memory chip manufacturing plant.

 

Although Intel continues to retain its unique Optane business, due to the lack of its own memory chip factory and the focus of Intel’s current capacity expansion has shifted to logic chip fabs, the Optane memory business is unsustainable.

Another key factor is that since Optane was launched, although it has its own advantages in performance close to DRAM, the market expansion has been limited due to the cooperation of motherboard manufacturers and its relatively high cost compared to SSD.

 

In addition, the abandonment of Micron, which also has 3D XPoint technology, seems to be a factor.

Although Micron has also announced several storage products based on 3D XPoint chips, such as the X100, it has never been officially launched.

 

It is understood that Micron has lost $400 million in the 3D XPoint product line in 2020.

In March 2021, Micron announced that it would immediately stop 3D XPoint development and shift resources to focus on accelerating the introduction of CXL storage products.

Based on the new strategy, Micron also announced that it will sell the Lehi, Utah fab used to produce 3D XPoint flash memory products. However, Micron intends to retain all of its intellectual property rights related to 3D XPoint.

 

So far, Intel has become the only supplier to sell products using 3D XPoint chips. The so-called single tree is difficult to support.

In the face of more powerful DRAM and SSD manufacturers, it is indeed difficult to open up the situation for 3D XPoint technology only by relying on the efforts of one Intel manufacturer.

 

Intel mentioned in its second-quarter earnings report, “We began to gradually close our Intel Optane memory business.”

Intel CEO Henry Kissinger also confirmed in the earnings conference call that he would close the Optane memory business.

There are reports that this will be the sixth Intel non-core business that Kissinger has “closed”.

 

Intel believes that the closure of Optane is part of the strategy of optimizing the product portfolio to support IDM 2.0.

They will also stop the development of future products, but will continue to support Optane’s existing customers during the transition period.

 

According to the data, Intel’s closure of Optane will cause losses worth US$559 million (about 3.7 billion yuan), which should include the impairment of Optane inventory and compensation for failure to perform.

 

It should be pointed out that although Intel has many products under the Optane brand, including Optane memory, Optane persistent memory and Optane SSD, the company previously classified all products into the scope of the “Optane memory business”, so Closing down is the entire Optane division, not just Optane memory products.

 



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