LEHI (Reuters) – Micron Technology said on Tuesday it would put a chip factory up for sale in Lehi, Utah, as it stopped manufacturing a type of memory chip it developed in conjunction with Intel nearly a decade ago.
Lehi is the only Idaho-based Micron factory to manufacture what it calls 3D Xpoint memory, a form of memory chip that aimed to find a sweet spot of performance in the two dominant forms of memory chip: DRAM, which is fast but expensive, and NAND, which is slower but cheaper. The factory will be sold in a transaction that is expected to close later 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 commercial director, told Reuters in an interview that they received a lukewarm response from customers because they would have had to rewrite large portions of their software to take advantage of the new type of memory.
Low demand means Micron cannot increase manufacturing to a volume high enough to justify the costs of continuing to develop the chips, Sadana said. He said underutilizing the factory will cost Micron $ 400 million this year.
After exiting the Xpoint 3D market, Micron plans to shift its development efforts to take advantage of a new faster industry standard for connecting memory chips to computer chips called Compute Express Link.
“We will have a (return) of this new investment that will be much higher because it will be easier to adopt the software ecosystem,” Sadana said.
Micron jointly developed Xpoint 3D memory with Intel starting in 2012. The company currently has a supply agreement with Intel that extends through the end of this year. Intel has 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 intellectual property associated with 3D Xpoint, but is in contact with multiple potential buyers from the factory. While he could not name the parts or how much the factory would sell, he said bidders could go beyond memory companies to include computer chip makers, analog chips or chip contract makers.
“It’s a good time to have an asset like this available, as several companies are fully leveraged from a supply capacity perspective,” Sadana said.
(Report by Stephen Nellis in San Francisco, edited by Alexandra Hudson)
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