Analyst: Xbox 360's overheating problems began with GPU

Gartner analyst Bryan Lewis has said that in trying to save money in producing the graphics chip for the Xbox 360, Microsoft actually ended up paying much more due to repair

The Redmond company wanted to avoid using an application-specific integrated circuit (ASIC) vendor in an attempt to save millions in production costs. Instead, it designed the chip on its own, outsourcing the manufacturing to Taiwan Semiconductor.

Unfortunately, Microsoft's design did not dissipate heat properly. This in turn caused the console to overheat, and was the root cause system problems which cost Microsoft $1 billion to fix -- far more than the tens of millions it was said to have saved.

When news of the overheating problems first surfaced, Microsoft defended its design, saying only 3% of units shipped were susceptible to overheating. That excuse was part of what prompted a fellow named Robert Byers to launch a class-action suit against the company in December 2005. That suit generated some substantive heat on its own, but it flickered out by the following March when the plaintiff voluntarily dismissed the suit without explanation.

Microsoft never confirmed exactly what went wrong with its design, only saying that it was a "design issue." The only clue that the company was to blame for the overheating was that it said it was an internally-initiated design, and not the fault of any of its partners.

EETimes reported on Monday that ATI -- arguably a very prominent ASIC vendor in its own right -- likely was tapped to build the graphics chip following the discovery of the problem. Lewis said that if Microsoft would have chosen an ASIC vendor in the first place, it might have never experienced any problems.

The reasoning for this is pretty simple, Lewis contends: ASICs have experience in building such chips, whereas big companies like Microsoft are something of a jack of all trades, yet a master of none.

The added experience of an ASIC producer can reduce the likelihood of design oversights, he went on, and thus potential issues may be caught well before they lead to a production problem. Lewis said that companies in Microsoft's position really do not need to be designing chips, since they'll only design too few of them for the process to become cost-effective.