Intel Looks to Gain From Data Explosion With New Drives
March 19 2017 - 5:29AM
Dow Jones News
By Ted Greenwald
Intel Corp. is starting to ship the first products based on new
technology it hopes will reshape the market for computer memory and
help it profit more from the tech world's data explosion.
The new storage drives, which Intel is making widely available
on Sunday, are based on technology called 3D XPoint. The company
bills the technology, which it says it spent more than a decade
developing, as a new memory category, bridging the gap between
speedy conventional memory where computers hold data for immediate
use and the flash memory used for longer-term storage.
"It blurs the line between system memory and storage," said
Diane Bryant, an executive vice president who oversees Intel's Data
Center Group. She said 3D XPoint, pronounced "three-dee cross
point," can help accelerate tasks such as fraud detection, retail
purchase recommendations, and autonomous driving.
Intel claims the raw 3D XPoint technology is 1,000 times faster
than the NAND flash commonly used in storage drives, though still
about 1% the speed of temporary memory called DRAM, or dynamic
random-access memory. The storage drives Intel is initially
shipping can't take full advantage of the new technology's speed
because of the way they connect to computers.
Intel, facing challenges in its core business making processors
for personal computers and servers, hopes the new technology can
expand its memory business, which reported revenue of $2.6 billion
in the past year. That is 3% of total global memory sales, which
amount to roughly $80 billion a year, according to Jim Handy, an
analyst with Objective Analysis, a semiconductor-market-research
firm.
Intel expects 3D XPoint to account for 10% of the memory
division's revenue in 2017, "ramping much more into 2018," Intel
Chief Executive Brian Krzanich told investors in January.
Intel also hopes 3D XPoint will spur growth throughout its
portfolio. The company is looking to data-intensive tasks such as
artificial intelligence to drive sales of processor chips and other
products, and it is betting on 3D XPoint to make those products
more attractive.
Realizing Intel's goals, though, will mean manufacturing the new
technology profitably at an attractive price.
Intel has said 3D XPoint chips can be made in conventional chip
fabrication plants. But doing so in volumes high enough to make the
technology affordable will be "a herculean effort," Mr. Handy said.
Intel has said that 3D XPoint requires new materials and involves
putting down materials in layers, both of which are challenging in
high-volume production, he said.
The less expensive of Intel's new drives offers 375 gigabytes
for $1,520, around $4 a gigabyte. That is below the cost of DRAM,
which according to Mr. Handy runs $4.50 to $5 a gigabyte, though
well above the 20 cents to 25 cents a gigabyte for NAND flash.
Mr. Handy, speaking before Intel disclosed its pricing, said he
thinks Intel will have to sell 3D XPoint at a loss until production
ramps up substantially. Intel said it expects the cost structure to
be closer to that of NAND than of DRAM.
Although Intel touts 3D XPoint as orders of magnitude faster
than NAND, it said the new storage drives it is shipping are
five-to-eight times faster than NAND-based solid-state drives,
because they are constrained by the conventional interface used to
connect storage to computers. It plans other 3D XPoint-based
products later this year that will connect more directly to
processors, allowing the technology to work at top speed.
Ultimately, Ms. Bryant said, Intel expects the technology to
drive innovations in computing systems, because new hardware and
software designs are needed to take full advantage of it.
Dell Technologies Inc. is testing the technology, according to a
person familiar with the matter. Alibaba Group is using it using it
to help execute internet searches and Harvard University in cloud
computing, according to Intel.
Intel developed the technology, which it is marketing under the
name Optane, with Micron Technology Inc., a longtime partner.
Micron, which will market 3D XPoint under the brand name QuantX,
plans to sell products based on technology this year. It hasn't
announced its plans for specific products.
How the technology works is a closely held secret that has given
rise to much speculation. While DRAM and NAND use transistors
etched in silicon to store electrical charges representing digital
1s and 0s, the new technology uses no transistors and stores no
charge, Intel has said. Instead, it uses electricity to make a
physical change -- like shifting between crystalline and amorphous
states -- in a proprietary material that Intel and Micron haven't
named publicly.
Write to Ted Greenwald at Ted.Greenwald@wsj.com
(END) Dow Jones Newswires
March 19, 2017 06:14 ET (10:14 GMT)
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