Intel Might Phase Out Its NAND Flash Business

Intel was one of the first companies to understand the advantages of flash memory and the role it would play in technological development. Its first flash-based product dates back in 1988 and had the size of a cardboard box, but it offered no less than 256 KB of NOR flash storage. Now, analysts think that Intel will leave its flash business behind, as it has become less and less profitable.

Intel has switched from the older NOR flash fabrication process to the newer NAND, in order to fully take advantage of the tremendous demand on the storage market, that has practically been set on fire with the advent of the portable media players and of the so-popular iPod.

More than that, the Flash business helped Intel fuel its own memory needs, such as on-board memory or, more recently, the solid-state drives to be welded directly on the motherboard's PCB. However, it is the time for Intel to draw the bottom line and think whether it would be a wise idea to retire its storage business.

"Although Intel has changed its memory strategy to focus on NAND, In-Stat believes that Intel will likely exit the discrete Flash market within a few years because of difficultly making a positive ROI," In-Stat analyst Jim McGregor writes in his latest "In-Depth Analysis" report back in December 2007.

The affirmation is 100 percent true, as one of the greatest factors that have negatively influenced the company's revenue for the last quarter was the NAND flash business, that recorded an operating loss of more than $2.4 billion in 2007. It's been a long time since Intel has not made any profit out of its Flash-based storage business.

According to iSuppli, Intel is the fifth largest NAND flash supplier, that account s for a 3.2 percent of market share. The undisputed leader in the market is the South-Korean Samsung conglomerate, that accounts for $1.68 billion in sales and 40.2% market share.

However, McGregor thinks that Intel does not stand a chance in the competitive memory market. "In-Stat believes the memory market is critical to Intel’s long-term strategy because of integration, but Intel will not survive in the competitive market for discrete memory components, " he claims.

Intel continues to lose important revenue in its Flash business and it would rather leave the discrete memory sector, but there might be contractual obligations to tie the CPU manufacturer to the market.

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