Micron Technology (MU)

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New Micron and Intel chip vastly expands data storage

BY BILL ROBERTS
[e-mail] 22, 2015 Updated 7 hours ago

Darren Thomas, vice president of Micron’s storage business unit, says storage capacity for cell phones is doubling every couple of years, creating a powerful market for the company’s new 3D NAND flash memory chips. KATHERINE JONES — [e-mail] |Buy Photo
Coming soon to a store near you: solid-state devices from Micron Technology Inc. with vastly more memory than you are used to.

Also coming: memory chips that will meet the ever-growing demand for capacity in smartphones, which now hold up to 128 gigabytes of storage space.

For social media and other companies with huge servers, Micron will be able to offer memory chips that can store more than three times as much data as some other NAND products do.

The chip behind Micron’s reach is called 3D NAND. The company’s version of the technology, co-developed through a joint research project with semiconductor giant Intel Corp., is a three-dimensional version of a two-dimensional NAND chip the companies introduced about nine years ago, said Brian Shirley, Micron’s vice president of memory technology and solutions.

NAND flash is a solid-state memory that does not require a hard drive to permanently store data, because it retains its data when a device is turned off. NAND flash is faster, smaller and uses less power than hard drives, which Shirley dubs “spinning rust.” NAND flash is widely used in smartphones and laptops.

Micron also makes dynamic random access memory, a common form of temporary storage in PCs that does not retain its memory when power is shut off. That makes a hard drive or NAND necessary to avoid losing data.

Later this year, Micron will start shipping its new NAND chips and products to customers and stores. The company predicts great things for it.

“We have started early manufacturing in Singapore,” Shirley said. “Through 2016-2017, this becomes the most competitive NAND technology on the market.”

Strong move for Micron

Micron’s move into super-storage chips is a big competitive step forward, said Betsy Van Hees, senior vice president of equity research for Wedbush Securities in San Francisco. Samsung, the world’s largest memory chip maker, introduced a version of 3D NAND about two years ago and holds about an 18-month competitive edge over Micron, the world’s No. 2 memory chip maker, Van Hees said. Micron and Intel “are substantially closing the gap” to six to nine months, she said.



Some analysts see the Intel-Micron NAND development not so much as a leap ahead as a play to hold ground in the marketplace.

“It tells me that Micron is keeping pace with the rest of the industry, which is critical,” said Mike Howard, a Boise semiconductor analyst for IHS iSuppli and a former Micron employee.

Development of the expanded memory chip comes as a Chinese state-owned company has expressed interest in acquiring Micron. Tsinghua Unigroup Ltd., of Beijing, planned to offer $23 billion for Micron, the Wall Street Journal and Bloomberg News reported last week, citing unidentified people familiar with the matter. Analysts said Tsinghua’s offer was too low to interest Micron and would likely raise national security concerns.

Neither Micron nor Intel would comment on a possible offer or how it might affect the two companies’ joint development agreement.

Micron and Intel might have an agreement as part of their partnership to protect them from having to provide joint research data to a new owner in the event either company is purchased, Van Hees said.

Micron’s new chip is its latest effort to expand in the highly competitive and often volatile memory market.

In 2013, the company bought bankrupt Japanese chip maker Elpida Memory Inc., vaulting it to No.2 among memory chip manufacturers, edging out South Korea’s SK Hynix, which analysts say is quietly working on its own 3D NAND technology.

The Elpida purchase strengthened Micron sales and profits. But Micron hit a bump in its last quarter when a slumping PC market brought down both.

The limits of Moore’s Law

About three years ago, Micron and Intel began work on 3D NAND, working at their own companies and putting researchers side by side at Micron’s research and development center in Boise, Shirley said.

Over the years, Micron shrank its chips while adding more storage space, an outgrowth of Moore’s Law. The law is named for Intel co-founder Gordon Moore, who in the 1960s predicted that chips would be shrunk and re-engineered about every 18 months to take less space and hold more data.

Moore’s Law became a principle that guided semiconductor development. It is credited with adding $3 trillion to the United States’ gross domestic product, Intel leaders say.

After 50 years, however, Moore’s Law is nearing its limits.

Think of a NAND chip as a city block populated with houses. With each new iteration and shrinkage of a chip, the number of houses increases and the houses are shoved closer to their neighbors. Eventually, the block becomes too crammed.

“At a certain point things get so small, so tight, that the physics becomes almost impossible to deal with,” Shirley said..

The industry’s response: If you can’t get smaller, get taller. Micron and Intel developed a chip they call a skyscraper that goes up 32 levels, although the high-rise is not apparent when you look at a chip. They also slightly enlarged each chip — like adding a bedroom to a house — to expand storage space on each level.

A conventional two-dimensional NAND chip holds about 16 gigabytes of information. A layered NAND holds about 48 gigabytes.

At the same time, Micron was able to keep the cost down, because each vertical chip did not require more space on the 300mm wafers where the chips are fashioned. That’s like adding more apartments to a skycraper without having to buy more land. Micron and Intel figured out a way to build multiple layers onto the same wafers.

“It has renewed Moore’s Law,” Shirley said.

Micron adds memory-based products

For years, Micron saw itself as a chip manufacturer. Workers would turn out billions of memory chips and sell them to customers who put them in their products.

But in recent years, the company moved toward creating its own products for the automotive and other sectors. It provides memory products for automobile navigation and infotainment systems, for example.

Shirley sees the company augmenting those products for uses such as automotive entertainment centers, which are “getting talked about as important a hub to consumers as what they find in their homes.”

Bill Roberts: 377-6408; Twitter: @IDS_BillRoberts

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