Intel recently provided updates to its stance in the PC market and its 3D XPoint launch schedule during its 3Q2016 earnings call. The company also updated its investors on the status of its new China-based Dalian fab, which it opened to return to memory manufacturing after a 31-year hiatus.
The PC Does...Better.
Intel's financials revealed that the company is on a pretty solid financial footing; it continues to make gains in several core areas, such as its PC business, which experienced 4.5% year-over-year (YoY) growth (a 21% quarter-over-quarter increase) with sales of $8.9 billion. Intel's PC gains are partially due to suppliers building inventory as well as a hike in the ASP (Average Selling Price). Intel's positive news comes amidst the backdrop of yet another gloomy Gartner report that indicates that PC shipments continued to decline for a record-setting second year.
Intel also managed to score $59 billion in revenue with a gross margin of 63%, which is an important gauge of the company's health in the wake of its far-reaching restructuring efforts that saw the company bid farewell to 12,000 employees (11% of its workforce).
"Thousands" of 3D XPoint Samples Shipping, 3D NAND Flowing In China Fab
3D NAND and 3D XPoint are both key tenets of Intel's strategy as it continues to diversify its portfolio amidst the somewhat stagnant PC market.
"As we said, and I think Stacy said...as well, in our Dalian China Factory, we are now running wafers, the yields are quite good. They’re as good as our existing factories," said Brian Krzanich, Intel CEO.
Intel noted during its Dalian announcement that it intends to produce both 3D NAND and 3D XPoint at its China-based Dalian fab, which signifies Intel's first solo memory production since 1985. Krzanich noted that the Dalian fab is producing wafers with strong yields, but it's unclear if he was referring solely to 3D NAND, or to 3D XPoint, as well.
"On the 3D XPoint, it will be qualified at the end of this quarter. And we’re shipping thousands of samples to customers. We’re shipping samples already; we’ll ship thousands through this quarter. And it ramps in 2017...So, ramp in ‘17, revenue growth in ‘17, samples, thousands in the fourth quarter and qualified at the end of the quarter," Krzanich stated.
In either case, it appears that things are moving along nicely on the 3D XPoint front, which we know Intel and Micron are jointly producing at the IMFT (Intel/Micron Flash Technologies) fab in Lehi, Utah.
Recent document leaks indicate that Intel is also preparing low-capacity 16GB and 32GB Optane products for the desktop PC market, which will likely be used as caching devices, but we haven't been able to verify their authenticity.
Krzanich's statement doesn't mesh perfectly with Intel's previous statements. Intel is producing 3D XPoint for both consumers and enterprise users, but development seems slow on the enterprise side. At IDF 2016, Intel announced that it would provide early access to cloud-based Optane (its brand name for 3D XPoint products) platforms by the end of the year. Intel's announcement that it would provide cloud-based access this year, in contrast to its earlier statements that it would ship physical products this year, is likely due to its cloak-and-dagger approach to the 3D XPoint rollout. Intel still hasn't announced exactly what 3D XPoint is, so the in-house strategy using cloud-based platforms makes sense to avoid competitors (or pesky journalists like us) from analyzing the new combined storage and memory product.
Intel is working closely with Facebook, which announced at the Flash Memory Summit that it's working with Intel's new memory, but no other company has indicated the same. As such, it's likely the samples are headed to very few key data center partners for now, so Krzanich's statements that "thousands" of samples are shipping this quarter may lend some credence to claims that 3D XPoint is speeding its way to a desktop near you.
