Micron Abandons 3D XPoint

Micron Technology, Inc. announced updates its portfolio strategy to further strengthen its focus on memory and storage innovations for the data center.

It will increase investment in new memory products that leverage the Compute Express Link (CXL), the recently introduced industry standard interface that enables flexible connection between compute, memory and storage.

With immediate effect, it will cease development of 3D XPoint and shift resources to focus on accelerating market introduction of CXL-enabled memory products.

Micron Abandon 3d Xpoint F1

“Memory and storage are critical to the data economy, and the need for data center memory innovation has never been greater,” said president and CEO Sanjay Mehrotra. “As a leader in memory and storage, Micron is committed to leading innovation to unleash the next gen of data centers. Today’s announcement reflects our focus to invest in high-value solutions for customers that also deliver strong shareholder returns.“

The broad proliferation of AI and advances in data analytics are driving workload requirements that necessitate a change to compute architectures. The CXL interface opens up new paths for platform innovation and optimization in the data center. Micron sees promise in new classes of memory-centric solutions that utilize CXL to scale the capacity, performance and content required by applications to run on infrastructure with greater architectural freedom.

In addition, Micron has now determined that there is insufficient market validation to justify the ongoing high levels of investments required to successfully commercialize 3D XPoint at scale to address the evolving memory and storage needs of its customers. Its portfolio changes do not impact the company’s overall technology investment levels as its focus on emerging memory solutions remains unchanged. The firm plans to apply the knowledge it has gained from the breakthroughs achieved through its 3D XPoint initiative, as well as related engineering expertise and resources, to new types of memory-centric products that target the memory-storage hierarchy.

In line with this new strategic focus, Micron is engaged in discussions for the sale of its Lehi, UT, fab currently dedicated to 3D XPoint production.

Micron Abandon 3d Xpoint F2

The company aims to reach a sale agreement within calendar year 2021.

These actions may result in certain nonrecurring items in the company’s GAAP financial results but are expected to be accretive to manufacturer’s near-term and long-term non-GAAP financial performance.

Comments

This comment was authored on March 16, 2021 as a Periodic Installment by HDD and SSD analyst firm Trendfocus, Inc.

Micron Will Abandon 3D XPointReturning to Core competencies of NAND and DRAM
Planning to sell Lehi, UT, fab by end of calendar year

Micron announced that it will cease all development and support for 3D XPoint. It is doing so for both lack of market adoption as well as to refocus its efforts on its core businesses - NAND and DRAM.

In ending 3D XPoint, the company is also selling its Lehi, UT, fab where 3D XPoint was supported and manufactured. This fab's run rate is over $400 million per year and Micron hopes to find a buyer sometime within calendar year 2021.

Micron CEO Sanjay Mehrotra was very clear that the company will continue to focus on manufacturing and output from its Taiwan and Japan fabs for DRAM and Singapore for NAND.

Regarding the refocus on NAND and DRAM, Micron will increase investment in new memory products that leverage the new Compute Express Link (CXL) interface. This interface was recently introduced as a new industry standard that helps link and enhance flexibility between compute, memory and storage. Micron hopes to shift resources to fast-track introductions of new memory products that support the CXL bus protocol, which is intended to run across PCIe Gen 5.0, emerging over the next couple of years.

Trendfocus has always been skeptical of the technical advantages and market opportunities for 3D XPoint, and we had refrained from forecasting it. Helping Micron reach this decision was the simple fact that 3D XPoint offerings introduced into the market thus far have not been able to compete with legacy NAND-based products from a cost standpoint, with NAND pricing maintaining a significant gap to the phase change memory technology. Despite the increased performance promised with 3D XPoint over the past number of years, weak market adoption did not justify the continued funding and efforts for such solutions. It has remained a niche product since its introduction as stated by CEO Mehrotra, and the future outlook to break out of that niche status appears dim.

The focus on improving memory-to-CPU performance bottlenecks with new protocols such as CXL was also cutting into the addressable market for 3D XPoint, which was intended to become a non-volatile performance tier between DRAM and NAND. Micron will take all the related engineering expertise it learned throughout its 3D XPoint experience and leverage it to new types of memory-centric solutions targeting the evolving storage hierarchy.