Samantha Rose Hunt17 March 2009, 10:45 AM
Does your laptop display broken-up graphics, or a blank screen? You might have a faulty graphics chip on board -- a problem that has already cost NVIDIA dearly to fix.
During its last fiscal year, graphics chip manufacturer Nvidia spent $US43.6 million ($67 million) to cover warranty and product replacement claims as they related to graphics chips which were sold utilizing a weak packaging material that allowed the chips to become damaged due to overheating.
In July 2008, Nvidia took a $196 million charge against its second quarter earnings for the specific purpose of covering any more warranty and replacement costs for the same issue.
However, the $43.6 million spent to date means that so far, NVIDIA has only spent a mere 22% of the original amount set aside, suggesting that there are still thousands of notebooks out there with the faulty chips.
The details of the money spent thus far for the replacement or repair of flawed chips is included in the
company’s annual report.
Nvidia did not increase the amount that has currently been set aside for the purpose of covering warranty costs for their flawed products, leading individuals to believe that the original estimate will be enough to cover the issue.
However, NVIDIA's allocation doesn’t account for any potential lawsuits which the company is currently fighting from customers and investors seeking damages in regards to the flawed chips and the method in which the issue was handled.