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Yesterday, Micron (NASDAQ:MU) announced that they are sampling a 16 nanometer NAND memory chip with the intention to enter full production in the 4th quarter of this year. This NAND chip is the highest density chip in the NAND memory industry. The 16nm node will enable Micron to manufacture 50% more chips per wafer, thus reducing the individual chip cost by one third.

The interesting thing about this new chip is that it is built using HKMG (High K Metal Gate) technology. This EE Times piece on the new chip includes more detail than the above Micron press release that doesn't mention the very important HKMG. HKMG lithographic processing has been the near exclusive domain of Intel (NASDAQ:INTC) since 2007. "K" is the dielectric constant of a material; higher dielectric constant allows integrated circuits to be built using thinner oxides without electrical leakage increasing. HKMG technology is what allows Intel to stay years ahead of the next best in class competition.

Intel and Micron have a long standing joint venture to cooperate on the development of emerging memory technology. This announcement confirms that Intel and Micron are still "connected at the hip" on memory development.

HKMG was also used on the Micron 20nm process of two years ago. Apparently the other memory manufacturers have not mastered HKMG, including Samsung (OTC:SSNHY) and Toshiba (OTCPK:TSHTY).

This one move, when fully implemented by Micron will double their capacity for NAND memory chips with no addition of brick and mortar. It also makes an $80 128GB solid state drive a 50% margin business for Micron while competition is stuck at 25% margin for the same sized SSD until they figure out HKMG processing. This is a brilliant bridge to 3D NAND technology that is expected to become a profitable technology in the 3-4 year time frame.

With Intel as a partner with two years of experience in 3d silicon structures through their TriGate logic process, don't be surprised to see Micron introduce 3D NAND well ahead of competitors.

The story just keeps getting better and better for Micron.

Source: Micron/Intel: Taking Leadership In NAND Memory