Intel has killed off the Optane memory business entirely, paying $559 million to exit.

Intel’s Q2 2022 earnings report today was as disappointing as ever, but it also hid a new announcement: Intel is shutting down its Optane business entirely. During the earnings call, Intel CEO Pat Gelsinger confirmed that Intel will divest its Opta business, clarifying a vaguely worded announcement in earnings documents. The move results in a $559 million inventory impairment/write-down. We’ve reached out to Intel for comment on the matter:

“In support of our IDM 2.0 strategy, we will continue to rationalize our portfolio. This includes evaluating businesses that are not sufficiently profitable or core to our strategic objectives. After careful consideration, Intel plans to discontinue future product development in the Optan business. We are committed to supporting Optan customers through the transition.”—Intel spokesperson Tom’s Hardware.

This marks Intel’s sixth non-core business since its arrival, including a $1.5 billion investment in the recent sale of its drone business to Elon Musk’s brother to SK Hinix, the SSD storage division. They are the core of Intel’s work.

Intel used Optane Memory to create both storage and memory products. In the year When it first launched in 2015, Intel and partner Micron touted its underlying technology, 3D XPoint, as offering 1000x the performance and 1000x the endurance of NAND storage and 10x the density of DRAM.

Intel has stopped making its Optane storage products for consumer PCs, which makes sense as it is at the beginning of a multi-year move to sell its NAND business to SK hynix. However, Intel already had the memory business for the data center, including fixed memory DIMMs that could work in conjunction with main memory – only Intel offered. Those products will now come to an end.

Gelsinger echoed the sentiments of Intel’s former partner Micron when it exited the business last year, citing an industry shift to CXL-based architectures as a reason for undermining the Optane business. Micron was the sole high-volume factory of 3D XPoint, the memory used by Intel to make Optane, and the company later sold the 3D XPoint fab to Texas Instruments, leaving Intel without its own manufacturing facility.

Industry watchers reported that Intel was serving existing Optan customers from the stock it had stockpiled from Micron before the fab closed, but it was not actively manufacturing the memory. Intel reportedly had several years of product inventory on hand, explaining the $559 million filing.

Interestingly, we saw Intel’s next Gen DDR5 Optane memory modules, codenamed Crow Pass, pop up last week. These DDR5 modules were planned to launch later this year with Intel’s oft-delayed Sapphire Rapids chips. Obviously this will not work.

Instead, Intel will effectively pay $559 million to end its Optan business.