Intel Finally Gives Up on Optane

Intel and Micron have developed a revolutionary new memory technology called 3D XPoint, but under the Optane brand it never met expectations as either an SSD or DIMM replacement.

Linley Gwennap

When announcing bad earnings, companies often toss in any other negative news they have, hoping it gets ignored in the overall furor. So it was that Intel, in the midst of a disastrous earnings report, mentioned that it will shut down its Optane memory business and take a $559 million charge atop an estimated $7 billion in prior losses. The announcement ends the company’s hopes of becoming a major memory supplier and boosting sales of its server processors.

Along with erstwhile partner Micron, Intel spent seven years flogging a new technology that aimed to revolutionize the memory industry by combining near-DRAM speed with near-flash cost. But the technology never lived up to its billing. By the time it reached the market—two years behind schedule—it was too expensive to address most persistent-storage needs and too slow for server memory. Seeing only small deployments, Optane never achieved enough volume to justify its unique manufacturing process. After Micron exited the partnership last year, Intel tried to keep going but ultimately admitted failure.

The Optane news came amid the company’s quarterly earnings report, which indicated a 22% drop in total revenue relative to 2Q21. This steep fall, combined with rising expenses, caused a rare quarterly loss for the usually profitable company. The PC business recorded a 25% decline owing to a weakening PC market, but AMD reported a 25% rise in PC revenue for the same period. In another sign of share loss, Intel’s normally strong data-center revenue dropped 16% while AMD’s gained a stellar 83%. One explanation is that Intel also noted another half-year delay in its next-generation Sapphire Rapids server processor, which the company now expects to ramp production in 1H23.