Micron Technology Inc. said Thursday it’s taking an option to buy out Intel Corp.’s share of their flash memory joint venture company IM Flash Technologies in a deal worth $1.5 billion.

IM Flash, established in 2005, is the world’s only producer of 3D XPoint memory technology (pictured), which is a nonvolatile or persistent memory that is meant to improve storage performance and reduce server memory costs. It’s used by Intel for its premium Optane-branded solid-state storage products.

Under the terms of the original joint venture agreement, Micron already owned 51 percent of IM Flash, and had the right to acquire the remaining share under certain conditions. Micron said it will exercise that right on Jan. 1 and expects the deal to be completed six to 12 months later.

The announcement comes after Micron and Intel said earlier this year that they would end their joint development efforts on the second-generation of 3D XPoint in the first half of 2019. From that point onward, the companies said, development of the technology would be “pursued independently” in order to optimize it for their respective product and business needs.

At the time of that announcement, analyst Patrick Moorhead of Moor Insights & Strategy told SiliconANGLE the split was the result of Micron and Intel having different priorities regarding their use of 3D XPoint. In Intel’s case, it’s focused on using it for solid-state drives for data centers, while Micron is more interested in automotive, mobile, special-purpose uses and various other emerging applications.

Under existing agreements, Micron will continue to sell 3D XPoint to Intel for up to one year after the IM Flash deal closes. What isn’t clear is how Intel will obtain 3D XPoint thereafter.

According to a piece in AnandTech, Intel has a couple of options, including negotiating a new agreement with Micron or manufacturing its own 3DXpoint at its Fab 68 facility in Dalian, China. But the latter option would require Intel to adjust its production plans because the Dalian fab is currently running at full capacity manufacturing 3-D NAND flash, an alternative storage product.

“Micron’s acquisition of IM Flash demonstrates our strong belief that 3D XPoint technology and other emerging memories will provide a unique differentiator for the company and be an essential solution for new data-hungry applications,” Sanjay Mehrotra, Micron’s president and chief executive officer, said in a statement.

Micron said IM Flash will become a wholly owned subsidiary after the deal closes.

Photo: Intel