Intel to reduce Optane memory business

It looks like the end may be in sight for Intel’s beleaguered Optane memory business. Hidden within a brutal second quarter 2022 earnings release for the company (more on that later today) is a very curious statement in a section that talks about non-GAAP adjustments: In the second quarter of 2022, we initiated the liquidation of our Intel Optane memory business. Additionally, Intel’s earnings report also notes that the company is taking a $ 559 million charge for “Optane inventory write-down” this quarter.

Taking these items by face value, it would appear that Intel is preparing to shut down its Optane memory business and associated 3D XPoint technology development. To be sure, there is a high degree of nuance around the Optane name and product lines, which is why we are seeking clarification from Intel, as Intel has several Optane products, including “Optane Memory”, “Optane Persistent Memory” “and” Optane SSD “. Nonetheless, in Intel’s previous earnings releases and other financial documents, the entire Optane business unit has traditionally been referred to as the “Optane memory business,” so it would appear that Intel is effectively liquidating the entire Optane business unit, and not just the Optane Memory product.

Update: 6:40 pm ET

Following our request, Intel sent a brief statement on Optane’s liquidation. While it doesn’t offer much in the way of further details on Intel’s release, it confirms that Intel is effectively ditching the entire Optane business.

We continue to streamline our portfolio to support our IDM 2.0 strategy. This includes evaluating discontinued operations that are not profitable enough or are not critical to our strategic objectives. After careful consideration, Intel plans to discontinue development of future products as part of its Optane business. We are committed to supporting Optane customers during the transition.

First announced by Intel in 2015, the company’s 3D XPoint memory technology was presented as the convergence of DRAM and solid-state storage. The unique bit addressable memory uses phase change technology to store data, rather than trapping electrons like NAND technology. As a result, 3D XPoint offers incredibly high endurance, on the order of millions of writes, as well as very high random read and write performance since its data doesn’t have to be organized into relatively large chunks.

Intel, in turn, used 3D XPoint as the foundation for two product lines. For its data center customers, it offered Optane Persistent Memory, which integrated 3D XPoint into DIMMs as a partial replacement for traditional DRAMs. Optane DIMMs offered higher bit density than DRAM, and combined with their persistent, non-volatile nature, made an attractive offering for systems that needed huge sets of working memory and could take advantage of its non-volatile nature , such as database servers. Meanwhile, Intel has also used 3D XPoint as the foundation for several storage products, including high-performance SSDs for the server and client market, and as a smaller high-speed cache for use with slower NAND SSDs.

However, the unique features of 3D XPoint have posed a challenge for Intel since the technology was launched. Despite being designed for scalability via layer stacking, 3D XPoint’s manufacturing costs continued to be higher than NAND on a per-bit basis, making the technology significantly more expensive than even higher performance SSDs. Meanwhile, Optane DIMMs, while filling a unique niche, were just as expensive and offered slower transfer speeds than DRAM. So despite Intel’s efforts to offer a product that can cross the two product spaces, for workloads that don’t benefit from the unique capabilities of the technology, 3D XPoint ended up falling short of DRAM or NAND in the respective businesses, making Optane products a difficult sale.

As a result, Intel has lost money on its Optane business for most (if not all) of its life, including hundreds of millions of dollars in 2020. Intel does not provide information about Optane’s revenue on a regular basis, but on a – off occasions when they posted those numbers, they were well in the red based on operating income. Additionally, reports from Blocks & Files said Intel is sitting on a significant oversupply of 3D XPoint chips, on the order of two years of inventory earlier this year. All of this underscores the difficulty Intel has encountered in selling Optane products and adds to the cost of a write-down / write-off, which Intel is doing today with their $ 559 million Optane write-down charge.

As a result, a potential slowdown for Optane / 3D XPoint has been on the way for some time, and Intel has taken steps to modify or reduce activity. Notably, the dissolution of the Intel / Micron IMFT joint venture left Micron ownership of the only manufacturing plant for 3D XPoint, while Micron abandoned its 3D XPoint plans. And after producing the XPoint 3D memory in 2021, Micron eventually sold the fab to Texas Instruments for other uses. Since then, Intel hasn’t had access to a high-volume fab for 3D XPoint, although if inventory reports are true, it hasn’t been necessary to produce more memory for some time.

Meanwhile, on the product side, the liquidation of Optane’s business follows Intel’s previous withdrawal from the client storage market. Although the company has released two generations of Optane products for the datacenter market, it has never released a second generation of consumer products (e.g. Optane 905P). And, after selling its NAND business to SK Hynix (which now operates as Solidigm), Intel no longer produces any other types of client storage. So picking up the remaining datacenter products is the logical, if unfortunate, next step.

Intel’s former Optane Persistent Memory Roadmap: What will never be

Overall, Intel decided to close the Optane / 3D XPoint business at a critical time for the company. With the launch of the Sapphire Rapids Xeon CPUs this year, Intel had previously planned to launch a corresponding third generation Optane product. The most important of these was to be their “Crow Pass” 3rd Persistent DIMM generation, which among other things would upgrade Optane DIMM technology to use a DDR5 interface. While Crow Pass development is presumably complete or nearing completion at this point (given Intel’s development schedule and Sapphire Rapids delays), actual product launch and support would still incur significant upfront and long-term costs, as well as requiring a Intel to support the technology for another generation. Give Intel a strong incentive to finally exit the business unit at a loss of money.

Instead of Optane persistent memory, Intel’s official strategy is to move towards CXL memory technology (CXL.mem), which allows you to connect volatile and non-volatile memory to a CPU on a CXL compatible PCIe bus. This would achieve many of the same goals as Optane (non-volatile memory, large capacities) without the cost of developing a completely separate memory technology. Sapphire Rapids, in turn, will be the first Intel CPU to support CXL, and the overall technology has much broader industry support.

AsteraLabs: CXL memory topology

However, Intel’s withdrawal of Optane / 3D XPoint marks the unfortunate end of an interesting product line. 3D XPoint DIMMs were a new idea even if they didn’t quite work, and 3D XPoint was built for blazingly fast SSDs thanks to its huge random I / O advantage – and that’s a feature that is unlike any other vendor. SSD. will be able to fully replicate anytime soon. So for the solid-state storage market, this marks the end of an era.

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