Nvidia: 'Previous generation' GPUs failing at high rates

In a filing with the US Securities and Exchange Commission yesterday, graphics hardware company NVidia stated defective MCP and GPU products in certain notebooks will cost the company between $150-$200 million.

Warranty, repair, return, replacement and "other consequential costs and expenses" are expected to hit the company as a result of a weak die and material set in certain "previous generation" products causing an unexpectedly high failure rate in the field.

The company, however, did not say which of its products has been failing so much, but it did say that the impacted products have been sold in significant quantities.

NVidia's current generation of GPUs, its 9-series, premiered last February.

Some have speculated that the "previous generation" mentioned in NVidia's 8-K report could be a version of the 8600M, which can be found in the Toshiba Satellite X205 Series, the Asus G series, and Apple MacBook Pro. Others have pointed to a recent surge in problems in the GeForce 8400M GS, which is common in select HP Pavilion, Acer Aspire, Dell XPS, Sony Vaio, and Asus U3 and W7 models.

These lines of notebooks are typically fitted with GPUs that match the somewhat loose description provided by NVidia. IDC recently reported Dell, HP, Acer, Apple, and Toshiba to be the top five vendors in the US, and each of those listed are among those companies' premiere product lines. For the last four quarters, NVidia has held an average 28% of the notebook GPU market, behind Intel but ahead of AMD/ATI. Sales in the third quarter of 2007 spiked a bit, and gave NVidia a brief 5% jump.

To stave off further cases of overheating, the company introduced a software driver that turns the cooling fan on as soon as the system is powered up. But keeping with its less-than-forthcoming theme, NVidia hasn't specified which driver release contains this fix, or whether it's available to consumers as well as OEMs. One driver released on June 23 supports many potentially affected graphics units, but does not expressly mention overheating issues. NVidia spokespersons were not available for comment today.

The company did say yesterday it does not see any other abnormal rates of failure other than in "certain notebook configurations," for which reimbursement discussions have already begun. The company hopes to obtain recompense for money lost through its insurance coverage as well as directly from responsible parties in the supply chain.

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