Micron, Intel Update 2nd Generation 3D XPoint Partnership

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MicronMU and Intel INTC took forward their long-standing relationship by updating the terms of their 3D XPoint joint development partnership formed in July 2015. The alliance resulted in the development of non-volatile memory that was "1000X faster" and more reliable/endurable than NAND.

The updated technology will meet the growing demand for personal storage and also cater to the media and entertainment market.

The companies noted that they will jointly develop the second generation 3D XPoint technology by first-half of 2019 at the Intel-Micron Flash Technologies (IMFT) facility in Lehi, UT.

Notably, this partnership will be terminated after the companies develop their second generation 3D XPoint. Intel and Micron will develop technology independently thereafter, enabling them to tailor products per their business needs.

Micron Technology, Inc. Revenue (TTM)

Micron Technology, Inc. Revenue (TTM) | Micron Technology, Inc. Quote

Micron-Intel Partnership

Micron and Intel have a partnership for NAND development since 2006. Intel and Micron have been R&D partners for several years, but earlier this year, they announced that after the 96-layer development, they would be parting ways. This makes sense because Intel's memory ambitions indicate that the two companies will increasingly be pitted against each other.

New Technology for Growing Digital Data

According to Research and Markets, the global NAND flash market will witness CAGR of 15.13% during the period 2018-2022 driven by the increasing adoption of smartphones and tablets with features such as gesture control, fingerprint scanners, image scanners, and GPS. Gaining momentum is 3D NAND, driven not only by smartphones, tablet PCs and notebooks but also enterprise adoption in data centers due to its reliability and efficiency.

Further, as digital data grows from 4.4 zettabytes in 2015 to around 44 zettabytes by 2020, companies will need powerful processors and game-changing memory and storage solutions that can turn immense raw data into valuable insights in nanoseconds.

3D XPoint technology based products are designed to reduce lag time between the processor and data, thus enabling faster analysis. Huge volumes of data gathered by retailers can be far more useful when quickly processed for things like fraud detection. Healthcare-related research would also benefit greatly as large data sets can be quickly processed for genetic analysis and disease tracking.

Given these factors, we expect Micron and Intel to strengthen their market position against peers.

Is 3D XPoint Living Up to Expectations?

3D XPoint based product, Intel Optane was launched in 2017. It can only be used in PCs with seventh generation Intel core processors. Its primary customers are "enterprise and cloud-based data centers, users of business and consumer desktops and laptops, and a variety of embedded and Internet of Things application providers."

However, Intel's 3D XPoint DIMMs failed to meet expectations as there were delays in execution, ultimately leading to lower sales.

Micron is expected to bring its 3D XPoint based products by the end of 2019.

Given their heavy investments over the last few years, Intel and Micron are expected to unveil next generation 3D XPoint based products that help end users leverage the technology and generate valuable insights faster.

Zacks Rank &Other Stocks to Consider

Currently, Micron and Intel sport a Zacks Rank #1 (Strong Buy).

Twitter TWTR and Marvell Technology MRVL are two other stocks in the broader Computer and Technology sector that also sport Zacks Rank #1. You can see the complete list of today's Zacks Rank #1 stocks here.

Long-term earnings growth rate for Twitter and Marvell is 23% and 11%, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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