Is Intel Trying To Destroy Micron?

Intel plans to invest up to $5.5 billion over the coming years to use its Dalan, China, facility to expand its NAND manufacturing capacity. Initial 3D NAND production is expected to commence in second-half 2016 in Dalan.

Barrons has said that with pricing pressure already present in DRAM, Intel’s move puts Micron in a state of uncertainty.

This is a little odd given that Intel and Micron are chums, but Barron’s Rajvindra Gill said that the move will reduce Chipzilla’s dependence on Micron.

More than half of output is expected to use 3D NAND in the next two to three years and Intel’s focus on the technology reduces its reliance on Micron as a supplier while transforming it into a competitor, Gill said.

Micron be the last one standing when the mergers and acquisitions the industry is seeing and be an industry also ran.

Intel’s focus on the non-volatile memory market could put the pricing and supply/demand environment under pressure.

Micron has already had difficulties setting up 3D NAND versus its peers and now has another significant challenger entering the market, Gill said.

Intel’s move to NAND places a major Micron customer at risk. While Intel noted that its relationship with Micron remains strong and that it will continue to focus on 3D Xpoint, we believe the IM Flash Agreement could be at risk.

With Intel producing more NAND on its own, it could look to lower its reliance on the joint venture.

Intel has a right to sell its portion of the joint venture to Micron. If Intel elects to do so, a closing date would be set within two years. Sales to IM Flash sales to Intel were $101 million in the third quarter, or 8 per cent of trade NAND revenue.
Courtesy-http://www.thegurureview.net/computing-category/is-intel-trying-to-destroy-micron.html