Intel ready to meet surging demand for advanced memory chips in China, rest of world as operations start at Dalian plant

PUBLISHED : Friday, 15 January, 2016, 7:11pm
UPDATED : Friday, 15 January, 2016, 7:11pm

Semiconductor giant Intel expects to meet growing global demand, especially in China, for advanced new memory chips as the company starts production of these devices at its facility in Dalian in the second half of this year.

The US-based chipmaker announced last quarter plans to spend up to US$5.5 billion to retool its existing semiconductor fabrication plant in Dalian, in northeastern Liaoning province, to manufacture so-called 3D NAND and 3D XPoint memory chips, which offer greater storage and faster access to large sets of data than conventional NAND technology.

“Intel expects China to consume nearly a third of the NAND chip market in 2016, and as a result is working to play a key role in helping China to build out this industry,” Technology Business Research (TBR) analyst Krista Macomber said in a report on Friday.

The company jointly developed its 3D NAND and 3D XPoint technologies with another major US chipmaker, Micron Technology.

Macomber said Intel’s new investment in Dalian followed its US$1.5 billion purchase in 2014 of a 20 per cent stake in state-backed semiconductor firm Tsinghua Unigroup.

In a conference call with analysts on Thursday in the US, Intel chief executive Brian Krzanich said the company was focusing on its memory business, along with its activities in data centres and so-called internet of things, to provide fresh growth for the company.

Intel’s flagship processor business has been hit hard over the past few years by the steady decline of the global personal computer market.

“In our NAND solutions group, we introduced a revolutionary new class of memory call 3D XPoint, the industry’s first new memory technology in more than two decades,” Krzanich said.

“Our confidence in the technology led us to announce in the fourth quarter that we were upgrading our Dalian fab in China to manufacture both 3D NAND and 3D XPoint, with production beginning later this year.”

According to research firm IHS, the global NAND flash memory market is expected to record US$30.8 billion in sales by the end of this year, up from US$23.6 billion in 2013, to lead growth in the overall memory industry.

Samsung Electronics was the first to start production of its own 3D Vertical NAND chips. In August last year, the Korean technology powerhouse introduced the world’s first 16-terabyte solid-state drive using its technology. A terabyte is equivalent to 1,024 gigabytes.

The 3D NAND technology co-developed by Intel and Micron was designed to create storage devices with three times higher capacity than competing NAND technologies.

The higher capacity that it enables would fit 3.5TB of storage on a gum stick-sized solid-state drive.

Intel and Micron’s other innovation, 3D XPoint, marks the industry’s first new memory category since the NAND flash was launched in 1989.

3D XPoint, which Intel claims to be 1,000 times faster and has up to 1,000 times greater endurance

than traditional NAND memory, is capable of turning massive amounts of data generated by the world’s internet-linked devices and digital services into valuable information in nanoseconds.

TBR’s Macomber said those technologies would “bring cost savings, lower power usage and high performance for a range of mobile consumers, marking an important investment area for Intel to increase market share”.

Intel, which announced on Thursday total revenue of US$55.4 billion last year, achieved record-high sales of US$2.6 billion from its memory business in the same period.