Micron Technology Inc. said it’s giving up on a type of memory chip developed in partnership with Intel Corp. and is selling a factory in Lehi, Utah.
The two U.S. companies had claimed that 3D XPoint chips would change the market by being able to operate as storage and a fast-access aid to processing. Micron said Tuesday that it no longer sees a business for the memory chips that would justify the expense of continued development and will invest elsewhere.
Micron’s decision is a blow to Intel’s attempt to make the technology mainstream and reassert influence over a memory chip business it once dominated. Its former partner is opting to sell the Utah plant rather than repurpose it because it makes more sense to expand other sites in Singapore, Taiwan and Japan, Micron said.
That move, at a time when there’s a global shortage of some kinds of chips, underlines the brutal economics of the industry. Some older plants, even when fully paid for, cannot compete with their larger, more modern counterparts.
“Scale and cost competitiveness are extremely important,” Chief Business Officer Sumit Sadana told analysts on a conference call when asked why the company had chosen to sell the facility. Micron, the largest U.S. maker of computer memory chips, is based in Boise, Idaho.
The company said it has already received and is evaluating offers for the factory. The equipment in the plant could be used for making logic or analog chips, or for outsourced production, Micron said.
“Micron’s announcement doesn’t change our strategy for Intel Optane or our ability to supply Intel Optane products to our customers,” Intel said in a statement. Optane is the brand Intel uses for products based on the 3D XPoint chips.
Micron said abandoning the technology and selling the factory will help improve its profitability by $400 million annually. The Lehi site was a former joint venture with Intel in which Micron exercised the option to buy out its partner’s stake and take control.