Is Micron Technology Inc. and Intel Corporation’s New 3D Memory a Game Changer?

On March 26th, Micron (NASDAQ: MU ) and Intel (NASDAQ: INTC ) announced the sampling availability of their jointly developed 3D NAND technology. This technology, according to the press release, promises to bring "significant improvements in density while lowering the cost of NAND flash."

In other words, this technology should allow for higher capacity solid-state drives to be built at competitive costs. The press release said initial 256GB chips are "sampling with select partners today" and that the larger 384GB chips will start sampling later in the spring.

Micron and Intel said this technology will be in "full production by the fourth quarter of this year" and that solid-state drives based on this technology will roll out from both companies "within the next year."

Is this a game changer for the industry?

Intel and Micron think so
One of the key points Intel and Micron representatives made during a webcast on their collaboration is that the 3D NAND technology will enable the companies to deliver the "highest-density flash device ever developed."

Intel and Micron said the density improvement should allow for more cost-effective NAND flash relative to prior 2D solutions. The companies also said this technology should allow for increased performance and endurance relative to previous-generation 2D solutions.

The companies were also keen to point out that their 3D NAND uses what is known as a "floating gate" structure. This, according to Intel and Micron, is a proven technology used in the "majority of flash" today -- using this structure in the 3D NAND "limits variables" and "increases quality and reliability," they said.

What about the competition?
AnandTech reported that both Samsung -- which has been shipping its own 3D NAND commercially since 2014 -- and Toshiba will use "charge traps" instead of floating gate.

According to semiconductor analyst Jim Handy, charge traps have some significant advantages over floating gate NAND. These include higher performance, better endurance, greater reliability, and lower power consumption.

What this means for both Micron and Intel
Micron is a pure-play memory company, so its competitiveness in the broad market for flash products will depend on how the Intel/Micron NAND stacks up (no pun intended) against the competition. Intel asserted the 3D NAND it is building with Micron has "disruptive cost."

If that proves true, Micron could gain NAND share by virtue of selling solid-state drives based on this technology at competitive prices.

Intel, on the other hand, has signaled that it views memory as more of a "strategic" play. Intel's NAND sales generally come via solid-state drive sales, and I would imagine its mix of drives is more heavily weighted toward enterprise/server-oriented sales than consumer-oriented sales.

I do not think Intel intends to be a general purpose NAND vendor -- it seems to want access to a solid supply of competitive, cost-effective NAND flash around which the company can build high value solid-state drives to sell alongside its expensive server processors. In short, it wants to be a "one-stop shop" in the data center, providing everything from the processors to the storage.