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Intel Returns To Memory Manufacturing, Future Of IMFT In Doubt

Rob Crooke, Senior Vice President and General Manager of the Non-Volatile Memory Solutions Group at Intel, penned a blog post that defines a tectonic shift in Intel's future non-volatile memory strategy. Intel is expanding its Dalian fab, which has been in operation since 2010, to produce its new 3D NAND and the revolutionary 3D XPoint.

Intel hasn't produced memory by itself since it left the DRAM market in 1985 (due to intense competition), and the Dalian plant was originally employed to manufacture older process nodes (currently 65nm) that are usually at least two generations behind current technology. The site is getting a drastic makeover, and by virtue of Intel's pending (up to) $5.5 billion investment, it will become a leading-edge non-volatile memory producer.

Intel indicated that it is producing its own non-volatile memory to extend its multi-source strategy and expand its manufacturing capacity, but the move seems drastic because of its implications in the IMFT (Intel/Micron) joint venture. Intel and Micron have been jointly producing NAND since 2006, and together they moved from the 74nm process to today's 20nm product. The fruitful partnership garnered a slew of awards over the following decade, and truth be told, without IMFT's leading position in promoting and supporting NAND, the industry might not be as far down the NAND road as it is today. Interestingly, Intel's announcement marks the first time the company has actually produced NAND outside of the IMFT venture.

Several years ago, the gap between HDDs and CPU processing power had become so wide that it had hamstrung the entire ecosystem. From Intel's perspective that wasn't ideal because it reduced the need for faster, and more expensive, CPUs. Intel was a leader in the race to ship the first SSDs to the client market, and it was quite vocal that its intent was to enable the industry as a whole, including its competitors, for the greater good. Intel leveraged its market position to foster broad acceptance of the new speedy storage devices, and it worked. Now SSDs are the hottest growth segments in all of storage.

However, manufacturing NAND is an extremely expensive proposition that requires some of the brightest minds in semiconductor technology. The tooling and other associated expenses run into the billions -- a single fab costs $6 to $8 billion. Unlike NAND itself, the NAND market is volatile. There are regular price swings, and whenever manufacturers overproduce the cost of NAND plummets, which presents the possibility of lost profits.

With such large investments required, and the uncertainties of the NAND market, some of the NAND vendors work with a partner to share the cost, thus diluting the risk. SanDisk and Toshiba have been strong partners in their Flash Forward alliance, which was also recently thrown into doubt by the revelation that SanDisk is in negotiations with Western Digital on a possible buyout offer.

Signs of a fracture in IMFT relationship, which we covered extensively, began when Intel withheld investment in Micron's 16nm NAND. Intel skipped the 16nm generation to focus on the joint IMFT 3D NAND, but as a result, Intel faced NAND shortages and was forced to source NAND from SK Hynix to meet demand. Rob Crooke also mentioned during Intel's 3D NAND announcement that it held rights to produce the new 3D NAND and might exercise that option, which led to speculation that Intel and Micron will not extend the IMFT relationship when it comes up for review in 2017.

Intel's announcement that it will produce 3D NAND and 3D XPoint at its China fab may be an indicator that the glory days of IMFT are coming to an end. Intel is moving rapidly on the initiative; Intel slated NAND production to begin the second half of this year, which is amazingly fast for a fab build/retooling. Intel will complete the fab repurposing coincidentally before the IMFT agreement comes up for review.

Micron also recently fielded an offer to be acquired by the Chinese government controlled Tsinghua Unigroup, but many speculate the deal fell through because the US government might bar the acquisition on national security grounds. The IMFT relationship may have also been a factor because it would require a significant amount of legal wizardry to navigate, or perhaps untangle, the IMFT relationship.

Intel's use of the Dalian fab to produce 3D NAND and 3D XPoint is also significant because it signals the company's continuing investment in China. The China market is exploding on multiple fronts, but the Chinese government is keen to enhance its own manufacturing and engineering talent and it often requires significant investments for companies to operate in the region. The Chinese government also offers hefty incentives to companies that bring new capabilities to the country, but Intel will not reveal if there are incentives involved. Rob Crooke did indicate in his blog post that its relationship with the Dalian government continues to be an "excellent partnership."

If IMFT were to separate it would be a significant shift in the memory market, and the loss of Intel as a partner could have devastating effects for Micron, in particular. Intel controls the CPU market, and thus the chipsets, which provides it incredible sway in the overall market. Rob Crooke provided a single line, "Our partnership with Micron remains very strong." in his blog post to signal the two companies are still moving forward together, and Micron representatives have also been scrambling to assuage investors that the union is strong. However, the hairline cracks in the relationship that began revealing themselves over the last year appear to be widening.

The semiconductor industry is undergoing a record-setting year of consolidation, but in the case of IMFT, and the uncertainty around the Flash Forward alliance, we just may also witness some deconsolidation as well.

Paul Alcorn is a Contributing Editor for Tom's Hardware, covering Storage. Follow him on Twitter and Google+.

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  • rluker5
    XPoint. I will replace my 4770k rig if they make this. Your CPU will be the limiting factor. Maybe future upgrades will be the bandwidth at which you access this. XPoint makes ssd's look like optical storage.
    Reply
  • aldaia
    16818204 said:
    XPoint. I will replace my 4770k rig if they make this. Your CPU will be the limiting factor. Maybe future upgrades will be the bandwidth at which you access this. XPoint makes ssd's look like optical storage.

    No need to replace the CPU. The bottleneck is always the memory. Even if Xpoint is faster than SSD it's still slower than RAM.

    Reply
  • uglyduckling81
    XPoint. I will replace my 4770k rig if they make this. Your CPU will be the limiting factor. Maybe future upgrades will be the bandwidth at which you access this. XPoint makes ssd's look like optical storage.
    Your basing your comments on some slides and advertising blurb from Intel about how amazing their new tech will be.
    AMD did the same thing with Fury X, a hundred billion times faster than the Titan X..... Fail.
    Be careful about believing company hype, it's often used to drum up share prices at opportune times. CEO is about to cash out better hype up this new hard drive...
    Reply
  • photonboy
    As said, XPoint is currently slower than system memory (i.e. DDR3 or DDR4). That can change through parallel (striping) of data I suppose but for now the chips are likely going to start in more expensive, mobile devices where power is a concern.

    Also...
    An i7-4770K should be a great CPU for a long time. DX12 games will extend the life of it for several years as DX12 is not only more efficient but can also use more threads efficiently.

    Thus upgrading the system memory would give minimal to no benefit. The best upgrade would be the GRAPHICS component such as an NVidia Pascal that's faster than a GTX980Ti.
    Reply
  • epobirs
    Intel isn't aiming Xpoint at the consumer sector initially and hasn't been forthcoming on when it will. By the time it's really a factor for a desktop system your 4770K will have had a long fruitful life and any machine incorporating Xpoint will likely also require a newer generation of CPU and infrastructure to exploit properly. Faster generations of PCIe and more lanes allocated to provide the needed bandwidth.

    We've just barely entered the era of PCIe connected storage becoming a mainstream consumer product. We've got several years to realize the full value of that before Xpoint really enters the picture for most people.
    Reply
  • JavaGuy147
    XPoint. I will replace my 4770k rig if they make this. Your CPU will be the limiting factor. Maybe future upgrades will be the bandwidth at which you access this. XPoint makes ssd's look like optical storage.

    If you think that even if we dropped one of these into a current machine that the CPU would be the bottleneck you are naive. The processor runs circles around memory, which runs circles around current storage. Even if this replaced RAM so that RAM doesn't bottleneck, the CPU would be plenty fast to deal with it, especially since the access latency would still likely be large compared to the processor clock. You would be very surprised how much common processors sit around waiting for everything else to complete their tasks.
    Reply
  • rluker5
    As said, XPoint is currently slower than system memory (i.e. DDR3 or DDR4). That can change through parallel (striping) of data I suppose but for now the chips are likely going to start in more expensive, mobile devices where power is a concern.

    Also...
    An i7-4770K should be a great CPU for a long time. DX12 games will extend the life of it for several years as DX12 is not only more efficient but can also use more threads efficiently.

    Thus upgrading the system memory would give minimal to no benefit. The best upgrade would be the GRAPHICS component such as an NVidia Pascal that's faster than a GTX980Ti.

    I read it won't be coming to DIMM until at least 2017 (some up to 6TB per pcworld) so I have some time left on my haswell. Pretty hyped about pascal too as I have 2 780ti's.
    And for DX12 ... They already use tiled resources, draw calls are way up, how much tex and shader cache could you stash on a TB of ram? Probably won't be a game where you could mod the draw distance, or textures up to stupid, but I can hope.
    Was hyped over the fury as well. Still mad at those 64 ROPs.
    Reply
  • zodiacfml
    They are investing in memory technologies because it can eat on big but slow HDD manufacturers share of the market. Storage industry will also become bigger as more data is produced.
    Reply