| Thursday, July 3 2008 |
NVIDIA admits that some of its notebook graphics processors are failing at “higher than normal rates”, in a filing with the Securities and Exchange Commission. These chip failures will cost NVIDIA anywhere between 150 and 200 million US Dollars this quarter financial year toward warranty, repair, return and replacement for laptops with such NVIDIA products incorporated.
Nvidia says that “significant quantities” of chips are experiencing thermal issues caused by possibly weak die and packaging – in essence the parts are overheating and failing, while not pointing out exactly which laptop models are affected by this. As an immediate response, NVIDIA prepared an emergency driver that maintains the fan cooling speed higher than original parameters. Expect the notebook to be noisier.
NVIDIA had announced yesterday that they were looking at a Q2 revenue falling more in the range of $875 million to $950 million contradicting analysts' speculation of a $1.1 billion figure. Repercussions soon followed at the Nasdaq, where the NVIDIA stock plunged 21.94 per cent or $3.95 to $14.08 a share.
Shareholders can get some respite from NVIDIA's recent press release which says that the company is seeking insurance to cover the costs incured with the issue of the failing notebook computer components. Says the press release:
Sources: TG Daily, NVIDIA
Nvidia says that “significant quantities” of chips are experiencing thermal issues caused by possibly weak die and packaging – in essence the parts are overheating and failing, while not pointing out exactly which laptop models are affected by this. As an immediate response, NVIDIA prepared an emergency driver that maintains the fan cooling speed higher than original parameters. Expect the notebook to be noisier.
NVIDIA had announced yesterday that they were looking at a Q2 revenue falling more in the range of $875 million to $950 million contradicting analysts' speculation of a $1.1 billion figure. Repercussions soon followed at the Nasdaq, where the NVIDIA stock plunged 21.94 per cent or $3.95 to $14.08 a share.
Shareholders can get some respite from NVIDIA's recent press release which says that the company is seeking insurance to cover the costs incured with the issue of the failing notebook computer components. Says the press release:
Separately, NVIDIA plans to take a one-time charge from $150 million to $200 million against cost of revenue for the second quarter to cover anticipated warranty, repair, return, replacement and other costs and expenses, arising from a weak die/packaging material set in certain versions of its previous generation GPU and MCP products used in notebook systems. Certain notebook configurations with GPUs and MCPs manufactured with a certain die/packaging material set are failing in the field at higher than normal rates. To date, abnormal failure rates with systems other than certain notebook systems have not been seen. NVIDIA has initiated discussions with its supply chain regarding this material set issue and the Company will also seek to access insurance coverage for this matter.You can read the complete press release by NVIDIA here.
Sources: TG Daily, NVIDIA
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