Intel Has Slight Issue With Support Chip: $300 Million In Revenue Lost
By Debra Wilson on February 1, 2011, 11:29 am
While it’s good that Intel managed to catch the issue early, and only chipsets manufactured after January 9th are flawed, this is still some 8 million Sandy Bridge chipsets destined for 500 different personal computer OEMs. If you happen to have a computer with a new Sandy Bridge chipset, there’s no need to panic. You’ll want to replace it eventually, but you probably won’t notice anything in the short term, and even in the long term, there’s only about a 5% chance that something will go bad. Intel is going to be working with all of its partners to arrange for modifications or replacements of any effected systems, and although it’s probably going to be a hassle for you, Intel is going to do what it can to make the process as minimally inconvenient as possible.
Affected Chips Are Support Chips
The affected chips aren’t the main processors, which are based on the so-called “Sandy Bridge” technology that Intel announced in January, but a support chip. The flaw means it may degrade with use over a period of months or years, slowing down the transfer of data to and from the computer’s hard drives and DVD drives.
Reduce Revenue
The snafu is expected to reduce revenue in the first quarter by about $300 million. The revenue forecast for the full year is not expected to be affected. Gross margin for the first quarter will fall 2 percentage points below previous estimates to 61%. For the full year, gross margin will be 1 percentage point less, or 63%. The overall cost to repair and replace the flawed chipsets is expected to be $700 million.
Speed Up Development
The business, which provides cellular platforms to phone makers, will help Intel speed up the development of its always-connected computing platforms, it said in a press release. Furthermore, the acquired unit will strengthen the buyer's communication portfolio with the addition of wireless mobility and cellular platforms, the company added.
