bad times ahead for nvidia

Nvidia, Dell, HP sued over defective chips

And securities action starts

By Examiner Staff @ Wednesday, October 01, 2008 4:28 PM

Two class actions were started against Nvidia. The first, filed against Nvidia, Dell and Hewlett Packard alleging that defective graphics chips were shipped in notebook PCs but the defendants have failed to start a programme to replace the controller chips.

The first action alleges that the defendants only offered a software program update which while it purportedly repaired the defective chip, causes damage by reducing battery life and reduction in the life span of the computer.

from hear

"Thus, despite these facts, consumers are stuck with the defective computers: no replacements, no refunds and no compensation from any defendant," the first filing made in a New York court by Louis Olivos alleges.

It's alleged the defendants failed to disclose the "unusually high failure rates of Nvidia's GPUs and MCPs, and only acknowledged the existence of problems in a July 2nd 2008 SEC form 8K. Nvidia said in that filing it would take a $150 million to $200 million charge to cover customer warranties. In July, HP admitted several models in its Pavilion and Compaq Presario used the defective chip. It is offering a BIOS update which the filing alleges is difficult and the fix "is no fix at all", causing the fan to run more.

At the end of July this year, Dell admitted a number of its notebooks suffered from the problem too. The problem causes multiple images, random characters on the screen, lines on the screen and no video. Dell also recommends a flash of system BIOSes, and it's alleged this doesn't fix the defective chips either.

The second class action, filed in a California district court, is made against Nvidia, its CEO Jen-Hsun Huang and Marvin Burkett. This alleges that the defendants disseminated false and misleading documents, statements and omissions about the defective graphics processor chips.

"Despite knowing of this defect and its inevitable and devastating consequences....since at least November 8, 2007, the defendants delayed disclosure to the investing public for at least eight monmths, until July 2008," the filing alleges.

On the news, Nvidia's market cap was cut by over $3 billion, said the filing. Plaintiffs in the class action "suffered substantial damages as a result of purchasing Nvidia securities which were artificially and falsely inflated by the defendants," says the filing. X
3 answers Last reply
More about times ahead nvidia
  1. Thats good news compared to the partners nvidia lost in the desktop gpu department
  2. Im not sure who the guilty persons here are. It could be some small factory that churned out al the chips, that used bad materials for their own purpose. Who knows? The problem tho is, the factories name isnt on the pc/lappy, those are Dell,HP and the way its meant to be played, nVidia. Time will tell on this, but if it is a factory screw up, how is anyone going to get their monies worth? The factory doent have the means to fix this, so in reality, all players would have to pick up the slack. If nVidia is seen to have covered this up, the honus goes on them, and thatll be bad indeed
  3. Hopefully this mistake will balance the developing speed between Ati and Nvidia.
Ask a new question

Read More

Tuner Cards Hewlett Packard Nvidia Graphics