Components & Peripherals News
Intel’s $9B NAND SSD, Memory Sale To SK Hynix: 6 Big Things To Know
CRN dives deep into the details of Intel’s NAND SSD divestiture, how it will help SK Hynix, which Intel products it will impact and what it means for Intel’s Optane business.
Intel Had Been Trying To Figure Out Its Long-Term NAND Plans
Intel had been exploring whether to get out of the NAND memory and storage business for some time, according to The Wall Street Journal. And the company has publicly admitted that the return on investment for NAND memory hasn’t been meeting expectations.
At a Morgan Stanley Analyst Conference in March, Intel CFO George Davis called NAND memory one of the company’s “big bets” that will give the chipmaker not just “differentiated technology” but a “a product that will play a bigger part in our customer success.
But, Davis said, while NAND memory has been able to return to profitability after a difficult 2019, it hasn’t been at the level the company would like to see.
“NAND in the data center is just becoming a more and more important element, but we haven‘t been able to generate the profits out of that to get the returns we would like to see,” he said.
One of the ways Intel could have improved profitability, he said, was through partnerships, which would likely mean the company would outsource at least some NAND manufacturing to external foundries. It’s something that company had previously said it was exploring, with Intel CEO Bob Swan saying in April 2019 that it was making evaluations to bring down costs.
In the second quarter, Intel reported that its Non-Volatile Solutions Group, which consists of NAND-based SSD products and 3D XPoint-based Intel Optane memory modules, grew 76 percent to $1.7 billion, an all-time high for the business unit. And while the business wasn’t profitable last year — with an operating loss of $600 million in the 2019 fiscal year — Intel has since turned things around this year, reporting a $300 million operating profit in the second quarter.