There has been a lot of talk about Intel (NASDAQ: INTC) participating in the market for flash-based solid-state storage. In fact, solid-state drives have become an important enough part of Intel's overall corporate strategy that the company spent a significant amount of time talking about that business at its investor meeting last November.

Let's take a closer look at Intel's strategy here.

Intel and flash memory
It is well-known that Intel and Micron (NASDAQ: MU) work together to develop and manufacture NAND flash via a collaboration known as IM Flash Technologies, or IMFT.

According to AnandTech, IMFT has three manufacturing facilities. In 2012, Intel sold Micron its stake in the Singapore and Virginia manufacturing plants. Micron and Intel still reportedly split the output of the Utah facility (which reportedly moves to the latest technologies first) in a 49-to-51 ratio in favor of Micron.

If you look at the following slide, it's not hard to see why Intel's slightly less-than-50% stake in 1 out of 3 factories is sufficient for its flash-related business objectives:

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Source: Intel.

The majority of Intel's flash-related revenue comes from the sale of solid-state drives, rather than from selling raw NAND flash itself. And, as you'll see shortly, Intel seems to be focused on the higher end of the consumer market as well as the data center market.

Intel plays in high-performance consumer as well as enterprise
The odds are good that if your notebook or desktop PC has a solid-state drive in it, it's not an Intel drive. Although Intel does have a presence in the consumer solid-state drive market, the company seems to focus on the higher end of that market. Its consumer-oriented solid-state drives tend to offer very high performance and reliability, but those drives don't come cheap.

This is no surprise, though, given that Intel's major focus is on developing enterprise-class solid-state drive solutions and its consumer drives are derived from those solutions. Note in the slide below that Intel's market share position in the enterprise flash market is quite good:

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Source: Intel.

What do the growth prospects look like?
Intel seems to be bullish on the prospects of the solid state drive market as a whole. According to the company, industrywide solid-state-drive revenue in 2014 came in at approximately $13 billion.

Moreover, Intel seems to think that the solid-state-drive market is far from fully penetrated. The company says that solid-state drives have seen what looks to be 16% market penetration as of 2014, with that number set to increase to about 50% by 2018.

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Source: Intel.

If Intel is correct, then that means there's still a very significant revenue growth opportunity ahead. I don't think that Intel will capture most of that revenue, but I do think that as the overall market grows (and, in particular, the enterprise flash storage market), Intel should be well positioned to grow.

How do the financials look?
According to Intel CFO Stacy Smith, revenue from the company's "Non-Volatile Memory Solutions Group" was approximately $2 billion during 2014. Smith didn't give precise operating profit numbers, but it looks like profitability in this segment is a bit choppy.

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Source: Intel.

Notice that the best operating profit that the company has been able to achieve here happened in 2011. In 2012, profitability slumped, but then rebounded during 2013. Then, in 2014, profitability came down again.

Between 2009 and 2013, year-over-year revenue growth usually led to operating profit growth. However, in 2014, Intel projected a significant revenue increase but actually saw operating profits decline. It's not clear whether this was more driven by increased operating expenses or a weakening gross profit margin percentage.

At any rate, as an Intel investor I would like to see the company actually break out this segment in its earnings releases rather than lump it into the "all other" category.

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Ashraf Eassa owns shares of Intel.

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