How Micron aims to compete with 3D XPoint

Micron aims to develop new storage-class memory products that compete with Intel’s Optane – using technology based on Compute Express Link (CXL)

Micron’s EVP and Chief Business Officer Sumit Sadana said yesterday: “We will end 3D XPoint development immediately and cease manufacturing 3D XPoint products upon completing our industry commitments over the next several quarters.” That means shipping Optane chips to Intel.

Explaining the company’s decision to withdraw from manufacturing 3D Xpoint in an investor call, Micron said the switch from proprietary CPU-to-Optane PMEM links to open CXL interconnects means its “focus is on addressing data-intensive workload requirements while reducing barriers to adoption, such as software infrastructure changes.”

Investor call

Micron said in prepared remarks it had derived substantial knowledge gain from 3D XPoint. “The knowledge, experience and intellectual property gained in this effort will give us a head start on several important products that we will introduce in the coming years… we will continue our technology pathfinding efforts across memory and storage, including our work toward future breakthroughs in storage-class memory.”

“Memory was always the strategic long term market opportunity for 3D XPoint.” However, significant problems have delayed progress: “One important challenge that 3D XPoint memory products face in the market is that the latency of access requires significant changes to data centre applications to leverage the full benefits of 3D XPoint.

“These changes are complex and extremely time-consuming, requiring years of sustained industry-wide effort to drive broad adoption. In addition, there are important cost-performance trade-offs that need to be characterised and optimised for each workload.”

Sadana said Micron is using its XPoint process technology and X100 XPoint SSD design teams in developing new CXL-based storage-class memory products due in the next few years. That means Micron will build product to compete with Optane and its 3D XPoint technology.

Intel said in a statement: “Micron’s announcement doesn’t change our strategy for Intel Optane or our ability to supply Intel Optane products to our customers.”

Analysts’ view

Jim Handy.

I asked Jim Handy from Objective Analysis for his take on tMicron’s XPoint withdrawal. To set the scene, he says that, for its entire history 3D XPoint memory has lost significant sums.  By his estimations this loss was roughly $2bn in 2017 and 2018, dropping to $1.5bn in 2019.  Micron, in its call, explained that its production of 3D XPoint was costing the company about $400m annually.

Blocks & Files: What will be the likely effect on Intel?

Jim Handy: I don’t anticipate a big impact on Intel.  Here’s why: In the prepared statements for Micron’s Investor Call yesterday management said that the company would continue to ship 3D XPoint to honour its commitments for the next several quarters. That removes any concern over short-term availability.  Intel has a small fab in New Mexico that already makes next-generation 3D XPoint chips and that can be ramped. I believe that it was once Intel’s largest fab maybe 20 years ago, so it’s certainly a large enough facility – it just needs additional tools. Of course, since Micron’s selling the fab that makes today’s 3D XPoint in Utah, Intel could simply buy it and solve the problem instantly.

Blocks & Files: How might Intel respond?

Jim Handy: I suspect that Intel has seen this coming for a long time and has a very solid contingency plan in place. The company will simply move from Plan A to Plan B. Of course, they will have to do some extra work to calm their Optane customers.

Blocks & Files: How should it respond in your view?

Jim Handy: I would favour the purchase of the Utah facility. It would be a seamless transition. I doubt that there’s a frenzy of likely purchasers since it will need significant re-tooling if it is to be used to produce something other than 3D XPoint.

Blocks & Files: What will be the effect on others storage-class memory suppliers, such as Samsung with its Z-SSD and Everspin with MRAM?

Jim Handy: Neither of these technologies (nor any other) plays into the heart of the Optane market, which is a persistent DIMM that sells for half of DRAM’s price. Z-SSD is not a DIMM, and Z-NAND is ill-suited for use in a DIMM (slow writes, erase-before write, etc.) so it’s not a fit for a DIMM, nor is Kioxia’s XL-FLASH. Everspin and Renesas MRAM, as well as Adesto’s and Panasonic’s ReRAM, all sell for considerably more than DRAM.

Blocks & Files: How would you sum up the state of Optane in the market now?

Jim Handy: I see little actual change.  Intel is definitely not left in a lurch, and Micron will be better off without the XPoint losses that it has incurred in recent years. While customers will be put in a position of having a single source for the technology, with no prospects of getting an alternate source in the near term, Optane’s unique product positioning will prevent Intel from being able to gouge, since Optane must sell at sub-DRAM prices to make any sense. I don’t anticipate any other memory makers rushing in to fill the void since they have visibility into both Micron’s and Intel’s losses in this market.

Overall Handy says we should expect Intel to continue to promote its Optane technology to provide a strong competitive advantage against AMD processors.

The Webb view

Mark Webb of MKW Ventures Consulting gave B&F his five-point take on Micron’s withdrawal;

  1. Intel needs to find a new supplier. Intel has a few back up plans, none are very cost effective. Intel can’t put more cash into this.
  2. 3D XPoint is by far the leading high density persistent memory. MRAM is a different market. Micron is abandoning development and the fab. Clearly this is not a good indicator of confidence in the technology’s revenue growth.
  3. Optane DIMMS, Persistent Memory. are the main market. Intel’s customers report that Optane Persistent memory has uses and is effective in certain application. The question is how many applications and how many servers are needed with Optane (DIMMS). Right now the numbers are far less than 10 per cent of servers need Optane Persistent Memory.
  4. Optane SSDs are a niche for data centres. This is true for Z-NAND as well. Persistent Memory is the market that matters
  5. CXL is the future of memory/storage. It is not clear why Micron thinks 3D XPoint is not applicable for CXL memory.
Micron X100 3D XPoint-based SSD.

Controlling difficulties

An industry insider who declined to be named told me: “As we understand from a source there, they [Micron] were unable to build the [X100 SSD] controller. XPoint is essentially phase change memory, so the controllers are entirely different from NAND controllers. The decision was made not because of market opportunity, but rather because of execution and market timing.”

“The [XPoint] silicon gets written to in entirely different ways… Understand this new type of media does not get written to in the classic program/erase cycle method, as NAND flash does. All of the mechanics are completely different. … you can’t use conventional flash controllers for this.”

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