Finance

Intel finally shuts down its Optane business

Intel’s Optane persistent memory tech was potentially game-changing, but floundered financially.
article cover

Francis Scialabba

· 3 min read

Top insights for IT pros

From cybersecurity and big data to software development and gaming. Our IT Brew newsletter delivers the latest news and analysis of trends shaping the IT industry, like only The Brew can.

Blink, and it’s gone. Amid the turmoil of a second-quarter earnings call, listened to by IT Brew, where Intel execs announced the firm hadn’t come anywhere close to achieving its targets, and later confirmed in its Q2 report, the company disclosed that it is shuttering its long-suffering Optane persistent memory business.

Optane is Intel’s brand name for its 3D XPoint memory technology developed jointly with Micron. Billed as DRAM and solid-state storage combined, the potentially game-changing persistent-memory computing tech was first announced in 2015. Its underlying phase-change technology held immense promise, and Intel packaged 3D XPoint in a variety of products, ranging from DIMMs partially replacing DRAM for data centers to high-end SSDs (as well as a lightning-fast cache for NAND solid-state drives).

Yet as Anandtech explains, Intel’s Optane DIMMs offered much slower performance at a higher price than DRAM, specializing only in extremely memory-intensive workloads, and its storage products couldn’t compete on price with high-performance NAND drives. And NAND just keeps getting cheaper.

The Optane business never made money–quite the opposite–and Micron jettisoned itself from the partnership last year. So, the writing was on the wall with this one. According to Intel’s Q2 report, it will be taking a $559 million writedown on “Optane inventory impairment,” meaning the project is shuttered and Intel considers the units it still has in stock a loss. As the Register noted, because Intel sold its NAND flash business to SK Hynix in 2020 for $9 billion, Optane’s closure means Intel is out of the SSD market entirely.

Intel will instead focus on compute express link (CXL), an open standard that powers data centers with ultra-fast CPU-to-device and CPU-to-memory connections. Intel was CXL’s primary developer, though virtually every major chip manufacturer is now a member of the CXL Consortium. Per the Register, Samsung and Marvell are among the vendors planning to offer GPU-like PCI-e 5.0 memory expansion modules that could theoretically accept many older types of RAM sticks, and rivals are moving ahead with other next-gen memory technology.

All told, Intel reported losses of nearly $500 million in revenue, down 22% year over year to $15.3 billion. It revised its full-year revenue guidance down to $65 billion from $68 billion, with CFO David Zinsner pointing the finger at “difficult macroeconomic environment together with our own execution challenges.”—TM

Do you work in IT or have information about your IT department you want to share? Email [email protected] or DM @thetomzone on Twitter. Want to go encrypted? Ask Tom for his Signal.

Top insights for IT pros

From cybersecurity and big data to software development and gaming. Our IT Brew newsletter delivers the latest news and analysis of trends shaping the IT industry, like only The Brew can.