Micron will stop production, sell its Lehi factory

Micron Technology Inc. said last week that it will put its computer chip factory in Lehi up for sale and stop producing a type of memory chip it jointly developed with Intel Corp. nine years ago.

The Lehi plant is Idaho-based Micron’s only factory making the Micron 3D Xpoint memory, a form of memory chip that was developed to find a price-to-performance niche in the highly competitive chip market. It was said to fall between the fast but costly DRAM chip and the slower and cheaper NAND device.

Micron said it has already received and is evaluating offers for the factory. The equipment in the plant could be used for making logic or analog chips, or for outsourced production, Micron said. Micron did not name the parties or how much the factory might sell for but said the bidders could go beyond memory companies to include makers of computing chips, analog chips or chip contract manufacturers.

IM Flash Technologies LLC was the semiconductor company founded in January 2006 by Intel Corp. and Micron Technology. The Lehi facility was built specifically for the partnership and production of jointly produced products. In late 2018, Micron exercised an option to buy out Intel and closed the transaction in October 2019. From that point the operation was known as Micron Technology Utah LLC. At peak production, the Lehi operation employed as many as 2,000 workers.

Micron introduced its first products based on the 3D Xpoint technology in 2012 with a set of solid-state drives aimed at data center customers. Sumit Sadana, Micron’s chief business officer, told Reuters in an interview that the new device received a tepid response from customers because they would have had to re-write large portions of their software to take advantage of the new type of memory.

Sadana said low demand means Micron cannot scale up manufacturing to a high enough volume to justify the costs of continuing to develop the chips. He said the under-use of the Lehi factory will cost Micron $400 million this year alone.

After exiting the 3D Xpoint market, Micron plans to shift its development efforts to take advantage of a new, faster industry standard for connecting memory chips to computing chips called Compute Express Link, Sadana said.