Nvidia spent $43.6 million to replace faulty graphic chips

Nvidia spent $43.6 million to cover warranty costs from flawed graphics chips during its most recent fiscal year.

Graphics chip vendor Nvidia spent US$43.6 million during its last fiscal year to cover warranty and product replacement claims related to graphics chips that were manufactured and sold with a weak packaging material, the company said on Friday.

In July 2008, Nvidia took a one-time $196 million charge against its second-quarter earnings to cover additional warranty and replacement costs related to faulty graphics chips, which the company said included a "weak die/packaging material set." Nvidia's financial year ended on January 25.

Based on the $43.6 million spent so far, approximately 78 percent of the original amount set aside, or $152.4 million, remains available to cover costs related to this flaw.

The amount Nvidia has spent so far to replace or fix the flawed chips was detailed in explanatory notes contained in the company's annual report that detail changes in funds that are set aside to cover the expected costs of product warranties and returns, a requirement under U.S. accounting rules.

Besides the July 2008 provision for additional warranty and replacement costs, Nvidia also released a software update to computer makers that makes notebook fans run more often to reduce the thermal stress on the affected graphics chips.

Nvidia did not increase the amount it set aside to cover warranty costs for the flawed products in its annual report, suggesting executives believe the original $196 million provision will be sufficient to cover the problem. But Nvidia faces the possibility of future payouts. The company is now fighting lawsuits from investors and customers who are seeking punitive damages over the flawed chips and its handling of the issue.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags nvidia

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Sumner Lemon

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?