nVidia said yesterday that it will take a hit of up to $200m to cover costs related to repairing defective GPUs it shipped to be used in laptops.
nVidia uncovered the problem with some older graphics chips that shipped in "significant quantities" of laptop PCs, the company said.
nVidia hasn't determined the exact cause of the problem but said it relates to a packaging material used with some of its chips, as well as the thermal design of some laptops. Modern processors generate considerable amounts of heat.
To tackle the problem, the company is releasing a software driver that will cause system fans to start operating sooner and reduce the "thermal stress" on the chips. The driver has been provided to laptop makers directly, said Derek Perez, an nVidia spokesman.
nVidia will take a charge against second-quarter earnings of $150m to $200m to cover the expected cost of repairing and replacing the products, which include graphics processing units and media and communications processors. It didn't say specifically which of its products were affected.
The products have been failing in the field at "higher than normal rates", nVidia said. In a filing with the US Securities and Exchange Commission, it said it was talking to its supply chain about getting reimbursed for some of the costs.
The company also had other bad news on Wednesday. It said it was lowering its revenue forecast for the second quarter due to pricing pressure and delayed product ramps. The company now expects revenue to be between $875 million and $950 million.