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New Intel Optane SSDs, DIMMs, flash remain on track for 2020

Intel executives said pandemic-related supply chain issues would not affect deliveries of next-generation Optane SSDs and memory modules and 144-layer NAND flash products in 2020.

Intel claims to be on track to deliver 144-layer 3D NAND flash and second-generation Optane SSDs and memory modules in 2020 despite supply chain challenges related to the coronavirus pandemic.

Rob Crooke, senior vice president and general manager of Intel's non-volatile memory solutions group(NSG), said Intel faced more than its usual set of problems to deliver those products.

"Certainly, in the early going," he said during a press briefing, "it felt like the situation normal was the crisis of the day."

Crooke said Intel incurred costs to open warehouses in different locations, charter flights and come up with other creative solutions to deal with supply chain issues. The end result was no significant impact to Intel's supply chain or major memory manufacturing sites in Dalian, China, and Rio Rancho, New Mexico, he said.

"The Dalian factory in China never had a reduction in output in any kind of meaningful amount," Crooke said of the Asian site that manufactures Intel's 3D NAND flash.

During an April 23 earnings call, Intel CEO Bob Swan said that, overall, the company had achieved more than 90% on-time delivery. He said Intel is investing more than $100 million in additional benefits to help employees.

But state offices of occupational health and safety in New Mexico, Arizona and Oregon received COVID-19-related complaints on Intel manufacturing sites. Bloomberg reported the complaints included failure to enforce social-distancing rules, supply masks to workers and provide proof that formerly symptomatic employees tested negative for COVID-19 before returning to work.

Records that TechTarget retrieved from New Mexico's Occupational Health & Safety Bureau show a March 26 complaint about the Rio Rancho plant allowing employees to eat at a company cafeteria without virus protection, at tables that were not six feet apart, with food and coffee left unprotected on tables. An April 8 complaint from Rio Rancho said that employees were not given COVID-19-approved sanitizer for disinfecting workstations, badges or keys. The bureau closed the complaints after Intel took "satisfactory corrective action."

Intel submitted formal responses to all complaints, and OSHA inspectors visited the sites in Oregon, Arizona and New Mexico, an Intel spokesperson said.

"We have not received any violations, and OSHA inspectors that visited our sites complimented us on our actions," the Intel spokesperson claimed.

Denser 3D NAND SSDs

Intel's 144-layer 3D NAND SSDs -- code named "Arbordale +" -- are on target for delivery to client and data center customers in late 2020, Crooke said. He said Intel would transition its product portfolio to 144-layer flash next year. The company said last year denser "Arbordale" quadruple-level cell (QLC) SSDs would ship before triple-level cell (TLC) drives. Denser flash can lower costs and reduce storage footprints for customers.

Intel also qualified its first PCIe 4.0 SSD at the end of the first quarter, ahead of schedule, according to Crooke. Intel joins other SSD providers, such as Samsung and Kioxia, in rolling out fourth-generation PCIe Gen 4 drives that can double performance over their PCIe Gen 3 predecessors.

Even higher performing, but pricier, second-generation Optane DC SSDs are due for general availability in late 2020. Samples of new single-port Optane SSDs, code named "Alder Stream," have already gone out to key OEMs and independent software vendors, according to David Tuhy, vice president and general manager of the software division for Intel's NSG business unit.

Tuhy said some vendors make single-port Optane SSDs look like dual-port drives "with some of their magic." But many OEMs prefer dual-port SSDs with highly available enterprise storage systems. They won't see the second-generation dual-port Optane SSDs generally available until the second half of 2021, according to Tuhy. He said Intel is still trying to ramp the first-generation, dual-port "Coldstream" Optane SSDs.

"Frankly, single port comes out faster just because it's less complex," Tuhy said.

'Alder Stream' advantages

"Alder Stream" Optane SSDs have improved transactions-per-second latency over their "Coldstream" predecessors. Intel said last year that mixed-workload tests showed "Alder Stream" SSDs could deliver an average read I/O latency of about 10 microseconds up to a load of at least 800,000 IOPS. With first-generation Optane DC P4800X SSDs, latency shot up steeply at 500,000 IOPS.

Intel's Optane DC persistent memory modules -- also called dual in-line memory modules (DIMMs) -- sit closer to the processor and can deliver even higher performance than the SSDs. Optane products use 3D XPoint technology that Intel and Micron developed to fill the performance gap between NAND flash and DRAM. Target workloads for the Optane DIMMs include big data analytics, in-memory compute and databases in vertical industries such as financial services, health sciences, education, manufacturing and retail.

Kristie Mann, senior director of product management for Intel's Optane DC persistent memory products, said second-generation Optane DIMMs are on track for delivery in the first half of 2020. The Intel spokesperson who provided Mann's update declined to clarify what she meant by "delivery."

Mann said on a recent briefing call that Intel would provide a quick update in June on the "Barlow Pass" launch on Intel's next-generation Xeon processor platform. She said Optane persistent memory is making considerable progress with deployments and more than 200 proofs of concept at Fortune 500 companies, five of the top seven cloud service providers, key OEMs, and more than 40 "next-wave" service providers and communications service providers.

Notable Optane deals that Intel executives cited include Google, SAP HANA, Dell EMC storage and Pure Storage. Tuhy said Optane SSDs are also doing well with hyper-converged infrastructure such as Dell EMC's VMware vSAN and VxRail and Cisco's HyperFlex.

Intel Optane revenue

Getting an accurate picture of Optane momentum from a revenue standpoint is difficult. Intel's NSG business unit reported revenue of $1.338 million in the first quarter, up 46% over Q1 in 2019. The company attributed the increase to NAND bit growth and higher Optane average selling price, as well as the general ramp of Optane. The revenue figures do not include Optane persistent memory, which falls into a separate bucket that Intel does not break out.

Intel reported the NSG business unit operated at a $66 million loss in the first quarter of 2020, compared to a loss of $297 million in the first quarter of 2019. The company said NAND -- part of the NSG unit -- was profitable and reduced the operating loss.

It makes good business sense for Intel to supply Optane whether they lose money on it or not.
Jim HandySemiconductor analyst, Objective Analysis

"It's progress," said Jim Handy, a general director and semiconductor analyst at Objective Analysis. "I said early on that they were going to lose money on it for two years, and I think I way underestimated."

Handy estimates Intel's losses attributable to Optane at about $2 billion in 2017, $2 billion in 2018, and $1.5 billion in 2019.

"Once they get to good economies of scale, they'll be able to get their production costs down to where the product is profitable," Handy said. He predicted that Intel would eventually get to profitability because of its unswerving commitment to spending on Optane.

"It makes good business sense for Intel to supply Optane whether they lose money on it or not, because they make up for it several times over on processor sales. Then, in the end, they're profitable," Handy said. "An Intel processor with an Optane DIMM runs significantly faster than an AMD processor that can't use an Optane DIMM. They're hooked to prevent the AMD processor from being able to use the Optane DIMM."

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