Thursday, July 3rd 2008

NVIDIA Admits to Selling Faulty Mobile GPUs, Shares Plummet

NVIDIA Admits to Selling Faulty Mobile GPUs, Could Cost it up to $200 M

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:
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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68 Comments on NVIDIA Admits to Selling Faulty Mobile GPUs, Shares Plummet

#1
Megasty
cdawall said:
hey look NV is down to $12.70 this is the loewst there stock has been in years



and for those looking at AMD its just a little down todays its been going up since the HD4K release


God, another 2 buck :eek: My advisor never been wrong but he just gave me another call & told me to wait a month :shadedshu I'm ready to dump 2-3 grand in them, now :cry:
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#2
btarunr
Editor & Senior Moderator
You gotta read this: http://www.dailytech.com/NVIDIA+Posts+Weaker+Earnings+to+Defective+GPUs+Warns+of+Lower+Sales/article12268c.htm

DailyTech
That was not the end of the bad news from NVIDIA either. It announced that it was facing a massive recall, due to overheating GPUs in notebook computers. NVIDIA reported higher than average failures in both the laptop GPUs and in laptop chipsets.
Recall = they already sold faulty parts.
Posted on Reply
#4
newtekie1
Semi-Retired Folder
cdawall said:
hey look NV is down to $12.70 this is the loewst there stock has been in years
Yep, a good time to buy for people wanting to stick it out for a while and wait for the stocks to go back up. I just wish I got in on the stock back in 2004 when their prices were below $3.15. $12.70 is down a lot from what it was at yesterday, but when you look at it, it is still way up from where it was at a few years ago.
Posted on Reply
#5
cdawall
where the hell are my stars
newtekie1 said:
Yep, a good time to buy for people wanting to stick it out for a while and wait for the stocks to go back up. I just wish I got in on the stock back in 2004 when their prices were below $3.15. $12.70 is down a lot from what it was at yesterday, but when you look at it, it is still way up from where it was at a few years ago.
i think now is the time to buy AMD stock if anything NV stock will probably keep falling until novemeber or so (just my prediction)
Posted on Reply
#6
btarunr
Editor & Senior Moderator
newtekie1 said:
Yep, a good time to buy for people wanting to stick it out for a while and wait for the stocks to go back up. I just wish I got in on the stock back in 2004 when their prices were below $3.15. $12.70 is down a lot from what it was at yesterday, but when you look at it, it is still way up from where it was at a few years ago.
If you're a NV shareholder, you are in a win-win situation. I made the final edit to the OP, NV announces that it's seeking insurance to cover that upto $200M that it could incur.
Posted on Reply
#7
lemnad
cdawall said:
i think now is the time to buy AMD stock if anything NV stock will probably keep falling until novemeber or so (just my prediction)
I would avoid both as any type of investment. Either one is going to have an extremely tough time making it through the next couple of years. Your going to see a lot of tech failures, mergers, buyouts etc. One of these companies will go bankrupt. If anything they would make a good short.
Posted on Reply
#8
cdawall
where the hell are my stars
lemnad said:
I would avoid both as any type of investment. Either one is going to have an extremely tough time making it through the next couple of years. Your going to see a lot of tech failures, mergers, buyouts etc. One of these companies will go bankrupt. If anything they would make a good short.
after tha AMD/ATi merger i doubt AMD will be the one getting swept under the mat there is to much they can do now even if they became a company similar to Via they would survive. Nvidia doesn't have the background AMD/ATi does to fall back on.
Posted on Reply
#9
mlee49
Hey Btarunr~
Any link to those drivers? Nvidia.com still shows January's 167 drivers. I'm interested since I just put a second nvidia card in my laptop.
Posted on Reply
#10
Easy Rhino
Linux Advocate
Megasty said:
God, another 2 buck :eek: My advisor never been wrong but he just gave me another call & told me to wait a month :shadedshu I'm ready to dump 2-3 grand in them, now :cry:
do it yourself.
Posted on Reply
#11
Silverel
I'd be really wary of buying into those Nvidia stocks. Tech has been sitting high and mighty over the slowing economy. A pop like that is gonna send all the shareholders in a frenzy. In reality, they only have so much product on the market anyway. A spike in new investors will just allow to old investors to back out with less of a loss, causing even more loss for new guys. Mmm... I'd say if it hits 8$/share then get into it. By the look of things, they've been overinflated, and need to settle quite a bit lower.
Posted on Reply
#13
mlee49
Silverel said:
I'd be really wary of buying into those Nvidia stocks. Tech has been sitting high and mighty over the slowing economy. A pop like that is gonna send all the shareholders in a frenzy. In reality, they only have so much product on the market anyway. A spike in new investors will just allow to old investors to back out with less of a loss, causing even more loss for new guys. Mmm... I'd say if it hits 8$/share then get into it. By the look of things, they've been overinflated, and need to settle quite a bit lower.
Wow Free tech reviews and stock analysis :laugh:
Thanks for the heads up.
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#14
WarEagleAU
Bird of Prey
so this includes integrated graphics as well? My wifes laptop has an integrated nvidia gpu (like 6100g or something.) I sure hope that doesnt fail because that will suck.
Posted on Reply
#15
Megasty
Easy Rhino said:
do it yourself.
Nah, over the last 8 yrs he has made me over 210 grand. I bought him a car for our 5 yr annv. :D If he say wait, I say how long. The stock market isn't written in stone but if he say the NV stock will steadily drop for another month, I believe him - but I still want to cash in while the in-ing is good :(
Posted on Reply
#16
imperialreign
cdawall said:
after tha AMD/ATi merger i doubt AMD will be the one getting swept under the mat there is to much they can do now even if they became a company similar to Via they would survive. Nvidia doesn't have the background AMD/ATi does to fall back on.
I agree.

Even though AMD's stock hasn't started to climb again, they've been fairly stable over the last few months - it will take some time for AMD to start showing any real gains again . . .

but, they're back on the right track as well - if AMD itself scores a hit with a new CPU offering by the end of the year, they'll defi be in great shape. It's kinda iffy right now on the CPU lineups, they're run into a lot of bad luck with the Phenoms, but I'm certain they've got something in the works aside from Fuzion.
Posted on Reply
#17
0elemental0
all i care about is WHICH gpus are effected.. i have a brand new ..fairly expensive lappie with a 8800m gts 512 in it...i want to know if its going to munch itself and where i can get it replaced. .haha
Posted on Reply
#18
lemnad
cdawall said:
after tha AMD/ATi merger i doubt AMD will be the one getting swept under the mat there is to much they can do now even if they became a company similar to Via they would survive. Nvidia doesn't have the background AMD/ATi does to fall back on.
I agree too. They are offering lower cost parts that offer comparable performance to that of Intel and Nvidia. Other than some stuff already in the pipeline I think these will be last high end consumer graphics cards we see for a while. The market for $300+ cards is going to all but evaporate as the economy disintegrates. I would say no one will thrive, but it is who can survive. Nvidia seems to be in a good position to fold first.
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