Are Intel and Micron parting ways in NAND?

SAN JOSE, Calif. – Are Intel Corp. and Micron Technology Inc. parting ways in their NAND flash venture?

One analyst says yes, saying that Micron is going it alone in NAND and without Intel. Intel is not commenting, saying the analyst is only speculating without hard data. 

For years, Intel and Micron have had a successful NAND manufacturing venture called IM Flash Technologies LLC. The venture has one fab in Lehi, Utah and is ramping up a new plant in Singapore. IM Flash is ramping up 25-nm NAND parts right now.

Over the years, there have been rumors that Intel wants to divest its portion of the venture. Intel’s main focus is solid-state storage (SSD) devices, but it is a bit player in NAND. The chip giant uses NAND from IM Flash for its SSDs.

Micron is a player in NAND, but to date, it is a bit player in SSDs.     

C.J. Muse, an analyst with Barclays Capital, said Intel appears not to be  investing in IM Flash. So it’s only a matter of time before it bails on the venture, Muse said.

Muse bases his logic on Micron’s capital spending patterns, which were disclosed Thursday (Oct. 8). Micron also reported lower than expected sales for the quarter ended Sept. 2.  

In a research note,  Muse said: ''In capex, Micron reported $950 million in capex in FY10 (consistent with our model) and guided to $2.4-2.9 billion in FY11 (with 67 percent NAND/IMFS; 33 percent DRAM shrinks; though management did footnote actual spending will depend on market conditions).  

''There are a couple of takeaways here - First, on a CY basis, we had assumed $1.2 billion in CY10 and $2.0 billion in CY11 -- so this is above our estimate.  If we add this to our capex model, we now get capex -9 percent in CY11 verses our official estimate of -10 percent.  Second, NAND capex of (about) $1.6-1.9 billion for IMFS highlights Micron going it alone (without Intel) and supports our thesis on growth in NAND capex in CY11.''  

Intel declined to comment. ''No comment here.  We’re in our quiet period and as you know we don’t respond to speculation,’’ according to an Intel spokesman.

However, the spokesman said the analyst is speculating without real data. ''We have made no such statement (regarding IM Flash). This statement from the analyst is pure speculation,'' the spokesman said.