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December 19, 2019updated 20 Dec 2019 11:30am

Micron to Cut Back Its 3D XPoint Fab, Relocate Equipment

Company wins sign-off for more Huawei exports.

By CBR Staff Writer

Micron suggested late Wednesday that it will mothball — or at least substantially downsize — its Lehi, Utah fabrication plant, which it took sole ownership of after buying out the IMFT joint venture with Intel in a $1.5 billion deal that closed in October.

“We plan on relocating equipment and certain manufacturing employees to other Micron sites “, the chipmaker’s CEO Sanjay Mehrotra said on an earnings call. “Redeploying equipment will also help us optimize Micron’s front-end equipment capex,” he added, hinting at issues ramping up 3D XPoint production.

The Lehi plant was dedicated to creating 3D XPoint memory products – an emerging memory category based on phase-change chalcogenide materials.

The move will help “right-size” the fab, the CEO said.

The announcement comes eight weeks after Micron touted what it described as the world’s fastest-yet SSD. The X100 is built on 3D XPoint technology and can handle a claimed 2.5 million input/output operations per second (IOPs), triple today’s SSD offerings. It is available for “limited sampling with select customers”, Micron said in October, without specifying price or broader production plans.

Read this: Micron Hits Market with “World’s Fastest” SSD – Its First 3D XPoint Material Product

Mehrotra admitted to investors: “It will take time to scale up our 3D XPoint product portfolio, ramp revenues, and achieve healthy margins… we are excited about the long-term potential of 3D XPoint for both memory and storage applications.”

The news came as Micron reported revenues of $5.14 billion for its fiscal 2020’s first quarter, down from $7.91 billion for the same period last year, but up from $4.87 billion on-quarter.

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In terms of DRAM production, meanwhile, its previously announced cleanroom expansion in Taiwan is “on track… we expect output in calendar 2021” said the CEO.

“In NAND, we are continuing to make progress on our replacement gate transition and expect to begin production on our 128-layer, first-generation RG node in the second half of fiscal 2020”, Mehrotra updated investors. “It will be followed by an introduction of a higher-layer-count, second-generation RG node in fiscal 2021 targeted for a broader implementation, which will begin to provide more robust cost reduction”.

Micron Wins China Export Sign-Off

There was good news for the Boise, Idaho-based memory heavyweight, which has applied for licences to export more products to Huawei — previously banned under Export Administration Regulations and Entity List restrictions.

Mehrotra said on the earnings call: “We applied for, and recently received, all requested licenses that enable us to provide support for these products, as well as qualify new products for Huawei’s mobile and server businesses.”

He added: “Receiving the licenses is a positive development, and we are thankful to the US administration for approving these licenses. Prior to receiving these licenses, Entity List restrictions severely limited our ability to qualify new products at Huawei.”

The company reported operating expenses of $811 million on “higher than usual R&D expenses to qualify new products.” The company now expects operating expenses to be approximately $3.3 billion for the fiscal year. Micron ended the quarter with total cash of $8.3 billion and total liquidity of nearly $11 billion.

See also: If Moore’s Law’s Dead, What Now for Silicon Valley? The CEOs of Arm, Micron, Xilinx Have their Say

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