LEHI (Reuters) – Micron Technology announced on Tuesday that it will sell a chip factory in Lehi, Utah, after failing to manufacture a type of memory chip developed in conjunction with Intel nearly a decade ago.
Lehi is the only Micron factory based in Idaho that produces what it calls 3D Xpoint memory, a form of memory chip that sought to find an ideal price / performance point between the two dominant forms of memory chip: DRAM, which is fast, but expensive, and NAND, which is slower, but cheaper. The plant will be sold in a transaction that is expected to close by the end of this year, company officials told Reuters.
Micron introduced its first technology-based products in 2019 with a set of solid-state drives aimed at data center customers. Sumit Sadana, Micron’s business director, told Reuters in an interview that they received a lukewarm response from customers because they would have to rewrite large portions of their software to take advantage of the new type of memory.
Low demand means that Micron cannot increase production to a high enough volume to justify the costs of continuing to develop the chips, Sadana said. He said the plant’s underutilization should cost Micron $ 400 million this year.
After leaving the 3D Xpoint market, Micron plans to shift its development efforts to take advantage of a new, faster industry standard for connecting memory chips to computing chips, called Compute Express Link.
“We will have a (return) on this new investment that will be much greater because it will be easier for the software ecosystem to adopt,” said Sadana.
Micron jointly developed the 3D Xpoint memory with Intel from 2012. The company currently has a supply contract with Intel that runs until the end of this year. Intel said it plans to develop future generations of chips, for which it uses a different brand called “Optane”, at one of its factories in New Mexico.
Sadana said Micron will retain all the intellectual property associated with 3D Xpoint, but is in contact with several potential buyers for the factory. Although he could not name the parties or how much the factory could sell, he said bidders could go beyond memory companies to include computer chip makers, analog chips or contract chip makers.
“It is a good time to have an asset like this available, because several companies are completely depleted from the point of view of supply capacity,” said Sadana.
(Reporting by Stephen Nellis in San Francisco, edited by Alexandra Hudson)
© Copyright Thomson Reuters 2021