Nvidia seems to be taking quite a beating today, with their stock prices dipping some 25 percent after the company revealed a financial forecast cut short due to slowing sales, product delays, pricing pressure from AMD / ATI, and a hefty $150 - $200 million payout to cover the expected cost of faulty chips.

Details are sketchy but Nvidia believes that the problem is caused by the thermal design of some laptops and packaging material used on the afflicted chips. So far there’s no word as to what product lines are affected, with them only saying that the problem involves ‘significant quantities’ of its previous-generation laptop GPUs and media control processors (MCPs).

To tackle the problem, Nvidia is releasing a driver update that will cause system fans to start operating sooner to reduce the thermal stress on the chips – of course it would also adversely affect battery life. The timing for Nvidia is terrible with AMD / ATI apparently on a roll, and could mean an opening for the latter to gain further ground in the graphics chip business. Time will tell.