Will 3D NAND Help Intel Defend Its Data Center Market?

Will 3D NAND Help Intel Defend Its Data Center Market?
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Intel’s Enterprise-class 3D NAND is a logical extension as the chip maker is looking to retain its market share in the data center market, notes Oppenheimer analyst Rick Schafer, who reiterated his Perform rating on the stock. In his report, which came after he had a meeting with SVP & GM of Intel’s non-volatile memory group, Rob Crooke, he talked about the company’s SSD business and the implications of its 3D NAND solution on the storage market.

Intel on par with Samsung in 3D NAND technology

“We view INTC’s push of Enterprise class 3D NAND as a logical progression as it continues to defend its market share in the data center,” Schafer stated. What is worth noting in the report is the fact that Intel has taken the benefits of its JV relationship with memory giant Micron to grow to the level of Samsung in 3D NAND technology in just five years, believes Schafer.

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The analyst notes that Intel is expecting its initial 3D NAND based SSDs to be successful in the enterprise market among data center/cloud firms on the back of its performance/latency, capacity and power advantage over traditional HDDs. The product from Intel will start shipping in early 2016 and could push NAND expansion in NBs from the current 30% to 50% by 2018, believes Schafer.

Intel expected to achieve revenue guidance

A few days ago, Piper Jaffray, in a report following a series of supply chain meetings in Asia, maintained its Overweight rating on the stock with a price target of $38. Analyst Ruben Roy noted that the PC market is lethargic, but he believes Windows 10, to be launched on July 29, will bring some hope for a third-quarter comeback.

Roy said that although the firm is expecting long-term improvement of PC sales during the second half, it remains cautious on Intel’s expectations for second-quarter growth. Roy said the firm is estimating that Intel’s Skylake chips will ship in the quarter, which could postpone the “meaningful PC build.”

Overall, the research firm sees moderate risk in the short term, but in the long run, the analysts expect the chip maker to achieve its full-year guidance of flat year over year revenue. On Wednesday, Intel shares closed up 1.82% at $31.82, and year to date, the stock is down by almost 14%.

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