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The Hidden Cost Of Intel's $700 Million SB Recall

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Anonymous
February 1, 2011 6:30:03 PM

Perhaps it is just me, but something about Intel's Sandy Bridge chipset recall just does not add up. Nvidia may have a few words to add to the story.

The Hidden Cost Of Intel's $700 Million SB Recall : Read more
February 1, 2011 6:44:42 PM

I was actually planning to Purchase an i5 2500k and everything else with it off of newegg with in the next 2 weeks...this kind of pisses me off
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February 1, 2011 6:47:09 PM

Good to see reputable sites like Newegg taking good action even if it's drastic to save customers the time and money of accidentally purchasing one of these faulty boards even if it cuts some of their sales. It'll probably make up far more in the long run. Long live NewEgg :D 
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February 1, 2011 6:49:36 PM

"why didn't Intel's validation team catch this problem?"

It is because of different revisions. On A Revision the faulty transistor isn't present. However, it is present on the B revision which is the one that has the issues. This is why. That information is widely available all over the web.
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February 1, 2011 6:56:45 PM

Intel and it's errors Buuu !!! AMD is taking too long !!! BUUUU !!!
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Anonymous
February 1, 2011 6:58:32 PM

FAIL in math ... $700,000,000 divided by 8,000,000 shipped = $87.50 each, not $880
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February 1, 2011 7:05:08 PM

I think it's going to be a LOT more than $700 million.
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February 1, 2011 7:08:37 PM

jeterderFAIL in math ... $700,000,000 divided by 8,000,000 shipped = $87.50 each, not $880

Yes, I've noticed that too.
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February 1, 2011 7:11:08 PM

Since its actually $87.50 per, the likely final cost will be much much higher
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February 1, 2011 7:12:56 PM

Well, if the error is found when they, let's say, have sold nearly the 8M units, think about lawsuits when some data was actually lost.

I think 700M now is way cheaper than a big lawsuit from a lot of people sown the road. Way cheaper.

Cheers!
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a b å Intel
February 1, 2011 7:18:51 PM

Here's one remark from the supporting link I found relevant:

"The scenario where Intel got 492 specific, repeatable, and very emblematic problem reports on the same day late last week that allowed the engineers to pinpoint the error in record time seems impossibly silly. Intel has some of the best silicon engineers in the world, bar none, backed by the best tools in the world, but this is too much of a stretch..."
I'm not supporting Intel here, and the article raises some questions, but:
1. Any sufficiently advanced technology is indistinguishable from magic. If Intel's engineers and their tools are that good (I have no reason to believe otherwise), then I can accept that they accomplished discovering and implementing a fix in record time. Consider the impact of satellite technology on the first phase of the Gulf War; Saddam had no clue then, and those outside Intel may not either now.
2. Who knew what, and when, may be of considerable interest, and more details may come out that point to dishonesty or other wrongdoing. As the article points out, the costs to Intel of this kind of nonsense would be huge; hopefully knowing that, they had enough sense not to have pulled any of that sort of nonsense.
We'll just have to see what happens!
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February 1, 2011 7:20:48 PM

What's funny is I just bought a new Core i7 2600k and an Asus P8P67 Pro mobo along with it lmao...

It's all good though, just use your SATA 6Gbps instead of the 3 and wait to hear something from Intel regarding an RMA process.
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February 1, 2011 7:21:40 PM

i'm pissed too, i can't beleive we're gonna have to wait till april for sandy bridge just because of a faulty sata3gb connection..really?? thats over kill
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February 1, 2011 7:22:34 PM

this is going to delay am3 price drops >_< growl i was hopign to pick up a chaepish 1090t
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February 1, 2011 7:23:55 PM

Well, actually, I think they didn't do their math very well.

If you read in here - http://www.anandtech.com/show/4143/the-source-of-intels... on Anand's analysis (The "It’s Notta Recall" paragraph), you'll see that the cost Intel estimates comes down to more or less full motherboards - $87.50 per chipset, which kind of makes sense, even if they don't have to make a whole new motherboard, it still costs to desolder the old chipset, labour, and testing, packaging, etc.

The thing is, all the stores and the distributors also have a stock of Core i5's an i7's they can't sell. Well, they can, but nobody will buy a CPU without being able to buy a Motherboard until March or April.

So, the stores will want to receive Nehalem based CPU's for free and only pay for them once they can restart selling SB CPU's. Or they will want to return the SB CPU's and get Nehalems in exchange. Either way, Intel must account for the CPU cost part of the equation, which I think they haven't (at least publicly).

It's unclear how they are going to handle the situation, but this is not going to be easy for them in the next two months.

And even consumers are left in an awkward situation. They can't return the motherboard now, because there is no fixed motherboard available to exchange with, unless they can also return the CPU (but what if they bought it from a different store ? - how is Intel going to handle this ?), and chose to get the money back or exchange with a Nehalem based system instead.

And what about consumers that use more than 2 Sata ports ? It's actually quite easy to happen: 1 main HDD + 1 DVD RW/Blu-Ray already fill both Sata 3 ports. With more and more people buying a second HDD to store videos and photos (or a low capacity SSD to boot from, putting the HDD as the "documents disk"), you're walking into trouble already.

How does the store solve this problem, especially if you bought the CPU and motherboard from different shops ? Does the motherboard seller give you a PCIe sata add-on card for free so you can solve the problem ?

This is a PR nightmare.
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February 1, 2011 7:30:06 PM

You based the entire story on some flawed maths. So, now you can either edit the maths so that the story doesn't make sense, or you can just delete the story. Nice one Toms.

Protip: Proof read next time.
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February 1, 2011 7:33:20 PM

$87.50 each chipset... hmmm... My Asus p8p67 Pro mobo cost $190 plus tax. They have to pay to have it shipped back and forth and replace with an entirely new mobo. Plus they better give me some sort of upgrade 'cause I am kinda pissed over the inconvenience... I think it will definitely be more expensive.
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a b å Intel
February 1, 2011 7:35:45 PM

The elephant in the room is AMD. That won't matter the least bit if Bulldozer sucks. If it doesn't, then two additional but unrelated possibilities come to mind:
1. If Sandy Bridge really wasn't ready, can AMD's lawyers convince a [non-techie] court that Intel released it early anyway just so people wouldn't buy AMD?
2. If Bulldozer is "decent," how many people left with a sour taste in their mouth by this mess might decide to give AMD a shot?

The plot thickens.
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February 1, 2011 7:44:15 PM

Bulldozer FTW!
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February 1, 2011 7:53:37 PM

Cyrix 6x86 ftw!
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February 1, 2011 7:56:30 PM

virtualmatrix258What's funny is I just bought a new Core i7 2600k and an Asus P8P67 Pro mobo along with it lmao...It's all good though, just use your SATA 6Gbps instead of the 3 and wait to hear something from Intel regarding an RMA process.


Exactly. I just swapped my HDD and DVD to the 6G ports... problem solved.
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February 1, 2011 7:59:59 PM

1) Intel has one of the best chip technologies in the world. I think they rushed it.
2) Not enough SATA3 ports is a problem. Why buy the latest technology if you can't fully use. I mean even a fixed chipset is broken (for me).
3)
My estimate on total cost is more than three and half billion USD.
That includes total motherboards shipped back with SB + other costs.
4)
Buy Intel stock now, it's cheap...or wait for the better cost estimates to kick in...or wait for Bulldozer...anyway: buy Intel, it's cheap now. That juggernaut will be more expensive when Ivy Bridge arrives. Then you either sell or just profit.
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February 1, 2011 8:16:29 PM

jeterder :

FAIL in math ... $700,000,000 divided by 8,000,000 shipped = $87.50 each, not $880

Not actually a FAIL. $700M divided by 5-15% of 8M ~ 800K, ~ 875$ per chip.
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February 1, 2011 8:27:43 PM

jeterderFAIL in math ... $700,000,000 divided by 8,000,000 shipped = $87.50 each, not $880


Hey guys, thanks for the eyes on this. Just chatted with Wolfgang and he passed along the following clarification:

"Wolfgang Gruener: Yes, I am guilty. In the original version of this article, the replacement cost per chip was said to be $880, which was obviously wrong, if $700 million relate to 8 million chips. This was a prime example of fingers being faster than the brain and I am gratefully that some eagle-eyed readers stepped on my toes. That said, the argument of the article remains the same. I don't think that Intel has said everything that is involved, especially since CPUs are pulled as well and that we know that these recalls are traditionally more expensive than the initially estimated cost - including rather blurry revenue impact such as consumer confidence."
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February 1, 2011 8:59:31 PM

CyberAngel1) Intel has one of the best chip technologies in the world. I think they rushed it.2) Not enough SATA3 ports is a problem. Why buy the latest technology if you can't fully use. I mean even a fixed chipset is broken (for me).3) My estimate on total cost is more than three and half billion USD.That includes total motherboards shipped back with SB + other costs.4) Buy Intel stock now, it's cheap...or wait for the better cost estimates to kick in...or wait for Bulldozer...anyway: buy Intel, it's cheap now. That juggernaut will be more expensive when Ivy Bridge arrives. Then you either sell or just profit.


do you guys just pull numbers out of your butt?
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February 1, 2011 9:01:55 PM

Bring on the AMD fanboys...
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February 1, 2011 10:14:16 PM

otacon72I wonderI wonder what's going to happen when Bulldozer actually makes it to market and it's far behind SandyBridge...


In all honesty, in my opinion I don't care lol. Fanboys are going to eat this up and use it to make them feel good for having an inferior CPU, it's what they always do. People like me who use Intel for gaming and AMD for office use just don't care you know? I think that people need to get a life and figure out that if it wasn't for Intel there wouldn't be an AMD market, and if you have no idea what I'm talking about take a 6-9 week business coarse in college.
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February 1, 2011 10:14:40 PM

Kaori cpuI was actually planning to Purchase an i5 2500k and everything else with it off of newegg with in the next 2 weeks...this kind of pisses me off


So was I... I was planning on buying a 2500k and a sabertooth p67 .. But this happened two days before I was expecting to buy it. Looks like I'll have to buy my cpu off ncix and find a website which sells p67 mobos. :\
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February 1, 2011 11:02:51 PM

virtualmatrix258 said:
In all honesty, in my opinion I don't care lol. Fanboys are going to eat this up and use it to make them feel good for having an inferior CPU, it's what they always do. People like me who use Intel for gaming and AMD for office use just don't care you know? I think that people need to get a life and figure out that if it wasn't for Intel there wouldn't be an AMD market, and if you have no idea what I'm talking about take a 6-9 week business coarse in college.


You might try a 6-9 week English/grammar coarse course.
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February 1, 2011 11:05:38 PM

intel just blow off there feet off. Until May to correct motherboard desktop. Until Aug or Sept before anything is fix. Loss....more like 3-10 billion dollars.
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February 1, 2011 11:06:59 PM

Taylor422 said:
You might try a 6-9 week English/grammar coarse course.


Oh wow! One misspelled word on my android!! Did I hit a nerve there buddy? I must have...he brought up grammar. That's a total sign of ignorance and the fact he has no ammunition but to troll. Have a good night.
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February 1, 2011 11:07:32 PM

instead of taking these products I wish they would have:

Dropped the prices to bargain basement. Sold them "as-is" with a clear notification that sata 3.0Gbps devices may not function over time, but 6.0Gbps would function normally.

I'm sure many people would consider buying it, and they would end up recovering some of their losses.

Seems to be a win for consumers looking for a bargain, and a win for companies that don't want to "recycle" millions of units for such a minor and potential non-issue
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February 1, 2011 11:13:52 PM

OMG people just go with a 1366 x58 platform it still outperforms sandy bridge!!!! What is wrong with you, don't you look at benchmarks?! The difference between my i5 760 and a i5 2500ES my shop recived for testing is less than 5%!!!!

If you really want new tech WAIT FOR TE X78 PLATFORM, it will launch at tje same time as Bulldozer to compete with it.
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February 1, 2011 11:35:05 PM

razzb3dOMG people just go with a 1366 x58 platform it still outperforms sandy bridge!!!! What is wrong with you, don't you look at benchmarks?! The difference between my i5 760 and a i5 2500ES my shop recived for testing is less than 5%!!!!If you really want new tech WAIT FOR TE X78 PLATFORM, it will launch at tje same time as Bulldozer to compete with it.



Only if you want to pay nearly or at $1k for a 6 cpu thats faster than sandy bridge. If your talking about the 4 core Nehalem's then i would recommend of taking your own advice and re-look at benchmarks.

Games, i care less for as most cpu right now are hardly stressed to the point of being to slow. What i care more about is stuff that truly uses the cpu to it's full power. F@H, AutoCAD, Rendering, ect......

From the benches i seen of the stuff i've mentioned above, i think the Sandy bridge is much faster than any Nehalem thats out on the market.
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February 2, 2011 12:15:26 AM

Quote:
Really Intel Fanboy, inferior huh. This is a huge Intel Fail with all the hype surrounding SB. What a joke. So Glad my inferior cpus over the years never had issues like this after all the hype and money behind it. I game just fine at 2560 x 1600 res with my supeior AMD 5970 and soon a 6990 also a AMD product. This is you "inferior AMD blah blah, this is me "you get a life and suck up the failure that is Intel now".


lol see. I told you they would come out of hiding. They have been since yesterday when they all got wind of it.
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February 2, 2011 12:37:03 AM

soldier37Yep we are many, and our current crop of CPUs have no issues and working just fine for alot less money thanks.


So you just admitted you're an AMD troll lol...okay. Oh and I hate to inform you but mine is working just fine as well. Sorry for the inconvenience this has had on your ego.
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February 2, 2011 12:46:42 AM

Quote:
Say what ever the story is out, the facts are in, SB is fail and so is Intel conversation is closed. Move along nothing to see here. Troll this. oh and get a real monitor I know your using one of those cheap TN 1080 panels for your pc. lol.


So one PART of a chipset on the Mobo = SB is an entire failure????
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February 2, 2011 12:52:18 AM

soldier37 is just a troll...He's such a bad one though he makes ignorant statements up as he goes and tries to insult people with their monitor brand?? Anyways, if I asked him for a comeback I'd just wipe his chin so it's all good.
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February 2, 2011 2:19:17 AM

Long time AMD fan but was very impressed when SB was released. I nearly sold one of my HD 5850 to help pay for the upgrade to Intel. Now Im going to wait to see if Bulldozer is a Bull or BS, and may still go with SB!
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Anonymous
February 2, 2011 3:07:25 AM

It's $80 per chip because it's not realistic to desolder the high-density BGA package the chipset uses, and even *less* realistic to be able to successfully reflow the new chip on without melting other parts. Maybe 10 years ago it would have been a "desolder and replace", but now it's "throw away".

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February 2, 2011 3:51:33 AM

I think Intel should release two new unlocked SB cpus. An i5 25xxK that can OC'd to 5.5 GHz & an i7 26xxK OC'd to 6GHz. In the same price point!

Well, just to appease pissed the off consumers. Hehe!
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February 2, 2011 4:49:15 AM

Funny everyone here using math, but maybe forgot that it was 8m chipsets shipped and that doesn't mean there was 8m boards made already or even sold. I would say price would change depending on phase in chain being it 8$ for chips that didn't make it to board yet to well over 100$ for recalling and replacing boards shipped to users.
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February 2, 2011 7:06:02 AM

ok, so 8M chipsets sold means those chipsets were sold to mobo manufacturers, not customers. The mass bulk of these chips are not even soldered to the mobos yet. Almost all in fact will simply be thrown away with next to no harm done. The 700M is for PR repair, and replacing those few customers who actualy return the products (which will largely be small-medium server boards, and extreme game systems which are much more expensive than your average board). But keep in mind, most users will switch over to the SATA3 ports which are unaffected, and many will never see signs of the problem in the first place.
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February 2, 2011 9:23:52 AM

You can still get Sandy Bridge Mother Boards and CPUs in Australia, for those who want Sandy Bridge before April.
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Anonymous
February 2, 2011 10:16:55 AM

Way to not understand the costs of a recall. The $1B estimate set aside not only covers materials and labour for repairs and replacements, but the entire infrastructure they need to institute to orchestrate a massive recall of pretty much everything shipped. They also include all of the missed sales that will happen pretty much during what was expected to be a peak period for the product.

This is what happens when a blogger focuses too much on the specifics, and fails to see the big picture.
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Anonymous
February 2, 2011 12:31:31 PM

I just have a simple question, why we need to wait until a new chipset arrive? OEM cant fix this by making a new mb and using a Jmicron or Marvell controller for those 4 sata 2 ports?
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February 2, 2011 3:02:53 PM

Does this mean that I'll be able to pick up a Sandy Bridge rig really cheaply?
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February 2, 2011 3:04:15 PM

1. Bulldozer Hype
2. Intel Rush
3. Intel Crash and Burn
4. ????
5. Profit ?

XD

Well, I will eagerly waiting for Q2~Q3 2011.
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February 2, 2011 3:47:21 PM

I bet Sandy bridge was priced too low, and eating away all other processors, so they had to remove it in the hope that some people will still buy the older gear.

I expect some seriously priced off core i5 660 and other processors and combo deals in the coming months, and the sandy bridge (2000 series) replacements being sold for more money than the ones sold today!
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February 2, 2011 5:14:38 PM

ProDigit10 is the only person who seems to understand the reality of the situation. Intel is not going to lose money in the long run by pulling the SB product now. The longer they would have waited, the greater the chance for loss of earnings. They simply didn't speculate, realistically, the popularity of SB over previous gens this time. They caught the glitch within the first month, and pulled product immediately. Now they wait.... Let users who were on the fence buy dated tech OR salivate for the next-gen architecture.(And they will pay $$$) I'm sorry to say, with the exception of admitting a FAULT, this is right out of APPLE's playbook. Planned obsolescence=strategic marketing. My question to everyone here: Do you really think multi-billion companies let something like an engineering flaw (SATAII Port) accidentally destroy quarterly earnings?

As long as the product fails outside of warranty, it is pure profit for the vendor. They want it to fail. How else do they get you to upgrade 2-3 years later?
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