LEHI (Reuters) – Micron Technology said on Tuesday it would sell a chip factory in Lehi, Utah, as it gave up manufacturing a type of memory chip it had developed with Intel nearly a decade ago.
Lehi is the only Idaho-based Micron factory to produce what it calls 3D Xpoint memory, a form of memory chip that sought to find a sweet spot of performance 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 deal 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 for data center customers. Sumit Sadana, Micron’s business director, told Reuters in an interview that they received a warm response from customers because they would have had to rewrite large chunks of their software to take advantage of the new type of memory.
The reduced demand means that Micron cannot expand production to a large enough volume to justify the costs of further chip development, Sadana said. He said underutilizing the plant should cost $ 400 million a micron this year.
After leaving the 3D Xpoint market, Micron intends to change 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) this new investment which will be much higher because it will be easier to adopt by the software ecosystem,” Sadana said.
Micron has jointly developed Xpoint 3D memory with Intel since 2012. The company currently has a supply agreement with Intel, which expires by the end of this year. Intel has stated that it intends to develop future generations of chips, for which it uses a different brand name called “Optane”, at one of its factories in New Mexico.
Sadana said that Micron will keep 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 outperform memory companies to include manufacturers of computing chips, analog chips or chip contract makers.
“It’s a good time to have an asset like this, because more companies are fully exploited in terms of supply capacity,” Sadana said.
(Reporting by Stephen Nellis in San Francisco, Editing by Alexandra Hudson)
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