Intel kills Optane amid cost cutting

Optane, the memory technology pioneered and championed by Intel, has seen its last days. Intel has decided to wind down the technology as part of a refocusing effort.

The news came on an earnings call with analysts to discuss Intel’s rocky second quarter. Since Pat Gelsinger has taken the reigns at Intel, the company has divested itself of McAfee (although that process began before Gelsinger arrived) as well as shed its drone business, NAND products, RealSense visual sensors, and Intel Sports.

“We continue to rationalize our portfolio in support of our IDM 2.0 strategy. This includes evaluating divesting businesses that are either not sufficiently profitable or not core to our strategic objectives. After careful consideration, Intel plans to cease future product development within its Optane business. We are committed to supporting Optane customers through the transition,” said an Intel spokesperson.

Optane served as a cache between SSDs and memory. As fast as SSDs are, they are no match for DRAM speeds and became a performance bottleneck. Optane had the storage persistence of NAND flash with nearly the speed of standard DRAM. (Related: For enterprise storage, persistent memory is here to stay)

While Optane was technically a boost to performance, no Intel competitor used it. None of the competition wanted to use a technology that enriched Intel. Intel went through a similar experience 20 years ago when it chose Rambus’s RDRAM over the industry standard DDR memory. Intel used RDRAM for all of one PC generation and no one else did, so Intel quickly migrated to DDR memory with the next processor generation.

“Nobody wants to be reliant on one company for a technology, especially a commodity like memory,” said Jim McGregor, principal analyst with Tirias Research. “If you have to rely on one vendor for a technology and that vendor screws up, you are hosed. If you can’t it get from multiple sources, it’s a dooming statement for the tech.”

There are no sale figures or installed base numbers available for Optane, but memory research firm Objective Analysis puts the cumulative loss for Optane from 2015 to 2020 at $6.8 billion. So it’s not hard to see why Gelsinger pulled the plug.

Gelsinger told analysts that with the execution of six business divestitures since he returned to the company in 2021, Intel has freed up $1.5 billion for investment in its IDM 2.0 strategy of making chips for other vendors. Its latest win came last week when it signed up Taiwanese chip giant MediaTek.