Like the remainder of NAND flash trade, Intel shouldn’t be notably proud of oversupply in the marketplace and lowering costs. The firm already stated that it will scale back NAND manufacturing this yr, and final week as a part of Intel’s invenstor bulletins, CO Bob Swan confirmed that the producer would additionally not construct up any further NAND capability within the foreseeable future. Meanwhile, coming off the heels of its IMFT divorce with Micron, the corporate is planning to maneuver manufacturing of 3D XPoint/Optane reminiscence to its Chinese fab.
Intel’s NAND Strategy
Intel has at all times had a barely completely different give attention to its reminiscence enterprise when in comparison with different makers of NAND. Initially, Intel thought of flash/SSDs as a approach to enhance its share within the BOM value of gadgets with an Intel CPU/SoC inside, a technique that’s nonetheless just about in place. With the arrival of 3D XPoint and high-capacity 3D NAND, the corporate began to think about these merchandise as differentiators for its consumer and server platforms, which completely serves its preliminary aim and makes its platforms extra aggressive. As a consequence, the corporate is extra inclined to make high-capacity storage that it may well use for SSDs on the whole and enterprise SSDs – specifically 3D XPoint/Optane – to generate larger income and return on investments. Given its targets, in contrast to different makers of NAND flash reminiscence, Intel shouldn’t be precisely all for promoting uncooked NAND gadgets on open market and drive up volumes to take care of market share.
Over the course of the latest couple of years, Micron, Samsung, SK Hynix, and Toshiba both began to construct new fabs (Korean firms have some flexibility and may modify their manufacturing strains for DRAM or NAND), or continued to ramp up present ones. Recently they slowed their manufacturing ramp up due to oversupply and low costs, however the development course of remains to be ongoing. This shouldn’t be the case for Intel, which doesn’t need to construct up further NAND capacities.
Bring Costs Down
Intel’s Fab 68 in Dalian, China, began manufacturing in 2010 and is at present used solely for the corporate’s 3D NAND reminiscence. The fab’s capability has been expanded since 2010, but it surely doesn’t appear to be the corporate has plans to take a position any vital quantities of cash in Fab 68 expansions for the foreseeable future (not less than so far as NAND capability is anxious).
Instead, Intel’s focus might be on bringing down the prices of 3D NAND that includes 64-layers, 96-layers, ‘and beyond’, which is an indicator that Intel is already engaged on its next-gen 3D NAND (with over 100 energetic layers) that might be produced at Fab 68. Interestingly, Intel continues to be assured of its 3D floating gate structure and believes that it’s going to allow it to proceed reducing per-GB prices of NAND flash within the coming years.
At current, Intel doesn’t anticipate its NAND reminiscence enterprise to be worthwhile this yr due to the general market tendencies. Therefore, its wants to chop down its prices to enhance profitability (or scale back losses) and preserve its aggressive positions on the SSD market (or not less than be extra versatile with regards to pricing).
Move 3D XPoint Production to Fab 68
At current, 3D XPoint reminiscence is solely manufactured at IM Flash’s fab in Lehi, Utah. Since Intel is about to promote its stake within the facility to Micron, it might want to discover a new plant to supply its persistent reminiscence. Over time, Intel wish to transfer manufacturing of its 3D XPoint/Optane reminiscence to its Fab 68 in Dalian, China (pictured under). Bob Swan wouldn’t say when the corporate expects this to occur, however solely stated that Intel might want to proceed creating its persistent reminiscence to take action.
Under the phrases of the present contract between Intel and Micron, the latter must provide 3D XPoint reminiscence wafers to Intel for as much as a yr after it acquires Intel’s stake in IM Flash’s Lehi fab (which is about to occur on October 31, 2019) at pre-agreed…
