Intel said on Wednesday it will release its second-generation Optane persistent memory module, code named Barlow Pass, by the end of 2020, along with its latest line of Xeon Scalable CPUs. The Santa Clara, California-based company is looking to get more of its customers to replace some of the NAND and DRAM in their data centers. Optane uses the 3D Xpoint technology it co-developed with Micron.
The world’s largest maker of computer chips has been selling its first-generation Optane memory module, Apache Pass, to challenge DRAM in servers. The modules, which can only be used with its Cascade Lake Xeon CPUs, are available in 128 GB, 256 GB or 512 GB capacities. They use the same memory bus to connect to the processor as DRAM, which Intel says is more costly and come in smaller capacities than Optane.
Details are still scarce, but Barlow Pass is set to be released with Intel’s 14-nanometer Cooper Lake and 10-nanometer Ice Lake CPUs in 2020. Intel also plans to release a second-generation Optane SSD, code named Alder Stream, which will offer faster performance than its current Optane SSD, called Cold Stream. Intel also been boosting the capacity of its 3D NAND flash to challenge the cost of HDDs in data centers.
Intel will start shipping its most advanced 96-layer 3D NAND before the end of 2019, Robert Crooke, Intel's senior vice president of non-volatile memory solutions, said at its Memory and Storage Day event this week in Seoul, South Korea. Intel will roll out 144-layer 3D NAND with quad-level cells (QLC) in 2020. 3D NAND stacks slabs of flash memory on top of each other like floors in a microscopic skyscraper of silicon.
Since he took over as Intel’s chief executive in January, Rob Swan has followed in the footsteps of his predecessor, Brian Krzanich, in betting big on the company’s Optane chips. Intel has highlighted Optane in recent years as an important part of its growth ambitions in the data center. By marketing Optane as a substitute for some DRAM and NAND, Intel believes it can boost the value customers see in its highly profitable Xeons.
This is increasingly important as Intel contends with the slowdown in Moore's Law, which has pushed some of its largest cloud customers including Alphabet’s Google and Amazon’s AWS to make custom CPUs. Delays in developing its 10-nanometer production node have been a black eye for Intel. The company has lost its chip production lead to TSMC, which is supplying 7-nanometer CPUs to AMD and its other rivals.
Even though DRAM can read and write data much faster than NAND, it’s volatile, meaning that the data inside is wiped out when the system loses power. NAND has much higher capacity than DRAM but is non-volatile. The stored data can be preserved even after the system is shut down. Intel says Optane has some key advantages, including the ability to permanently perserve data like NAND and speeds much closer to DRAM.
"We have high-performance Optane products that we really think are differentiated," Swan said on a conference call with analysts in April. "So strategically, we think it's really important. Technically, we think we have a real advantage. And third, we think we can get good returns." Intel started selling the chips for use in data center late last year. But the company needs more investment in manufacturing to meet future demand.
In January, Micron said it will spend up to $1.5 billion to buy out Intel's stake in its flash memory manufacturing plant, IM Flash Technologies, where 3D Xpoint is developed and produced. The move came months after they announced plans to stop co-developing future generations of 3D Xpoint, which is supposed to be cheaper and higher capacity than DRAM and offer faster performance and higher endurance than 3D NAND.
The joint venture was 51% owned by Micron and 49% by Intel, which is trying to figure out where to mass-produce Optane after the deal closes. There are supply agreements in place so Intel can contract out its Optane production to Micron for one year following the deal. Micron, which has been struggling amid a steep decline in memory prices since the second half of 2018, in May said it intends to close the deal by October 31.
Intel has been gaining ground with more than 150 partners trying out its Optane memory chips over the last year. Google has started renting out Xeon CPUs paired with Optane to its customers over the cloud. Oracle has added Optane to servers for running through massive databases. Cisco, Lenovo, Dell and other OEMs are also offering integrated systems that bring together Intel’s Xeon CPUs, 3D NAND and Optane SSDs.
Intel has been having a tough time in the memory chip business. Last January, the company discontinued its co-development of 3D NAND with Micron after a decade. Intel has delayed plans to boost 3D NAND production due to oversupply conditions, which have hammered average selling prices (ASPs). Intel has amassed more than $400 million in losses over the last year on slightly more than $4 billion in memory sales.
But Intel has high hopes for its Optane memory chips. The market for Xpoint technology is set to rise from slightly more than $100 million in 2021 to $3.5 billion in 2023, according to Objective Analysis. In May, EVP of Intel's data center business, Navin Shenoy, said its customers will spend $15 billion on NAND and DRAM in 2019 that could be swapped out with Optane. That opportunity could exceed $22 billion by 2020, he said.
