Nvidia spent $43.6 million on faulty chips

By on March 16, 2009, 1:04 PM
Last year in July Nvidia announced plans to take a charge of almost $200 million against its second-quarter earnings to cover the expected cost of “significant quantities” of failing notebook chipsets and graphics processors. While their troubles relating to this issue are still far from over the company claims it has only needed to spend $43.6 million so far to cover additional warranty and replacement costs.

Though it was not immediately clear which parts were affected and how widespread the problem was, a report by the Inquirer said that all of Nvidia’s G84 and G86 graphics processors were in fact defective. Nvidia refuted those claims, saying the problem was confined to a few HP laptops only, but it later became apparent that laptops from other manufacturers such as Dell were also affected by the heat related issues. Their solution? Make fans run more often to reduce the thermal stress on the affected graphics chips.

Of course, many found this unacceptable as it would also adversely affect battery life of notebooks. More than $150 million remain available to cover the problem, but Nvidia certainly faces the possibility of future payouts to both customers and investors seeking punitive damages over the flawed chips and the company’s handling of the issue.




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