Micron announced today that it has entered into a definitive agreement to sell its Lehi, Utah fab to Texas Instruments for $900 million in cash. In March, Micron announced that it planned to sell off the fab, bringing an end to its production of the radical new 3D XPoint (Optane) memory technology that it developed with Intel. Texas Instruments plans to deploy its own technologies at the site, meaning that it will not be used for 3D XPoint production. Intel currently doesn't have any known high-volume production of the strategically important storage/memory media. However, it is known to produce a small amount of the media for research and validation at its New Mexico facility. As a result, Intel will likely have to establish its own production lines to ensure the supply of its Optane based SSDs and persistent memory DIMMs for its data center clients, though demand has seemed tepid.
Micron chose to exit 3D XPoint manufacturing due to lackluster demand that the company said had "insufficient market validation to justify the ongoing high levels of investments required to successfully commercialize 3D XPoint at scale." The company recently divulged that it lost $400 million this year alone due to the lack of demand for 3D XPoint.
Micron has an agreement to produce 3D XPoint (which Intel brands as 'Optane') for Intel until the end of 2021. However, Intel's own efforts to productize Optane, which uses the 3D XPoint media, have met with slow but steady uptake in the data center but fizzled in the consumer market. As such, Intel ceased production of all Optane devices for desktop PCs in January 2021.
The economic value of the sale weighs in at $1.5 billion for Micron. Texas Instruments will pay $900 million in cash for the fab, while Micron will recoup another $600 million from secondary sales of additional tools and other assets. Micron has already lined up buyers for several of those assets, while other assets will either be sold to other buyers or shipped out to its other Micron manufacturing sites. In addition, TI will convert the 300mm facility for 65nm and 45nm production. It will also attempt to retain all of the Lehi, Utah employees after the closing of the sale, which is planned to occur by the end of the calendar year.
Intel and Micron developed the revolutionary 3D XPoint persistent memory, which melds the speed and endurance of DRAM with the persistence of data storage devices, in a secret joint effort that spanned a decade. The first formal announcement came in 2015.
The Lehi sale marks the end of Micron's 3D XPoint efforts, though the company does retain its IP associated with the technology. The company previously bought Intel out of its stake in their IMFT joint venture for $1.5 billion in 2018. Micron announced several of its own storage devices based on 3D XPoint memory, like the QuantX and X100, but they never came to market, leaving Intel as the sole supplier of 3D XPoint-based products.
Micron says that it will shift its focus to developing memory products that support the Compute Express Link (CXL) standard, an open memory standard that ties together disparate pools of memory and compute.
“Micron’s Lehi, Utah, facility has a strong history of technology innovation and leading-edge semiconductor manufacturing,” said Micron President and CEO, Sanjay Mehrotra. “We are pleased to have reached an agreement with Texas Instruments as it is an industry leader and truly values the talented Lehi team and the capabilities this site offers to deploy its technology effectively. We are greatly appreciative of the contributions that the Lehi team has made to Micron, as well as the collaboration and engagement Micron has had with the local community.”
This is breaking news. We've reached out to Intel for comment and will update as necessary.
