I have always liked Intel (INTC, Financial) for its diversity. Despite the falling PC shipments, Intel's shares have performed better than its peers’ shares, and this seems likely to continue due to Intel’s multiple revenue streams.
Intel is a company that holds a robust position in the market, being a vendor of logic semiconductors. In the third quarter, the company observed continued strength in its memory business as sales escalated 20% year over year. However, the company’s memory products are still not so famous around the world, and it has a lot of room to grow.
Over the last few years, there have been a lot of rumors suggesting that Intel might acquire Micron Technology (MU, Financial). Although Intel never made a bid for Micron, the two companies are working together now and have come up with a product. Recently, Intel, together with Micron, developed 3D XPoint memory and a floating-gate 3D NAND technology; 3D XPoint technology accounts for the company’s first new memory category in more than two decades.
3D XPoint technology is an advanced technology that is 1,000 times faster than NAND and up to 10x denser than conventional memories, like DRAMs. The introduction of 3D XPoint technology will offer new opportunities to the company as it enables memory application to be performed at a much more rapid rate and lower costs.
Intel is trying to move its needle from NAND flash to solid state drives as the market is relatively competitive, which results in less margins.
The primary goal of the company is to work with Micron Technology to develop modest memory media and to use that media in much higher solutions. The company’s data center-oriented solid state drive, DC P3700, with its least configuration –Â 400 GB is available for around $900 –Â and with its highest configuration – 2TB for $4,300.
The company is planning to use 3D XPoint technology in its solid state drives to deliver significant performance. It also has other plans to replace traditional DRAM with the 3D XPoint memory modules. However, 3D XPoint is not as fast as DRAM, but it is nonvolatile as well as much denser. In numerous data center applications, nonvolatility and superior memory size could make 3D XPoint memory modules an enhanced substitute to DRAM.
Conclusion
The new product can help Intel make headway into the storage business by enhancing its presence in the SSD market. This can potentially act as another big revenue drive for Intel and help the stock move higher in the near future. Moreover, the high margin SSD will also boost Intel’s bottom line and the partnership with Micron will likely prove to be beneficial in the future.
