Micron ejects Intel from flash JV. What will Intel do next?

Micron last week said it would exercise its right to buy out Intel’s  share of IM Flash Technologies, a joint venture between the two to fabricate NAND and 3D XPoint chips. Intel says this is a pre-announcement and nothing changes. For now.

At the same time Intel has strongly indicated that it intends to continue XPoint chip manufacture if Micron exercises the buy-out clause. That would enable it to continue to supply its Optane-branded devices and drives using 3D XPoint chips.

A new fab could cost more than $10bn and take two or more years to get into production. The $1.5bn cash that Micron will pay for Intel’s stake in IM Flash is little more than a down payment. Intel has a 3D NAND foundry at Dalian in China and could use space there to build XPoint chips, or seek to expand it.

In a statement Simon Read, Intel’s PR manager for memory and storage, implied that the company may already have plans in place to ensure continuity of supply.

He said Micron “can’t officially make the call until January 1, 2019. The operation of the IMFT factory would not change until after the close of the call, which is at Intel’s discretion for up to one year. There is no near-term change to Intel’s plans in the coming quarters—this has been part of our planning for some time now.

“Intel has a number of manufacturing options available to us within the time window. We’ve been shipping a broad portfolio of Intel Optane technology products for over a year with a continually expanding product line. We will continue to lead the industry with this exciting new technology.”

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