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Nvidia Takes $119.1 M Charge for Faulty GPUs

By - Source: Tom's Hardware US | B 34 comments

Faulty GPUs take a bite out of Nvidia.

While the cutting latest Nvidia GPUs appear to be mostly free from manufacturing error, the faulty GPU continues to plague both the company and owners of the chip.

Disclosed in its quarterly filings, Nvidia revealed a charge that cost the company $119.1 million over the last four months to cover warranty and replacement costs related to the faulty chips due to weak packaging materials, according to Network World.

The $119.1 million charge itself brought company's bottom line down, as the company recorded a quarterly net loss of $105.3 million. This compares to a net loss of $120.9 million reported in the second quarter of 2008.

Nvidia CEO Jen-Hsun Huang called the charge just a small distraction, and that he sees signs of a recovery of the company's business.

"Nvidia's business is recovering. Product demand is improving, and our strategic investments are leading to new growth," Huang said.

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Top Comments
  • 21 Hide
    Pei-chen , August 7, 2009 11:55 PM
    I can't wait to see Nvidia and ATI's DX11 cards. GTX200 and HD4000 series are getting boring.
  • 14 Hide
    cabose369 , August 8, 2009 1:00 AM
    lol @ the pic of Nvidia GeFail!!!
Other Comments
  • 4 Hide
    NewJohnny , August 7, 2009 11:50 PM
    Thank god this is finally fading. I ended up throwing my hp laptop in the trash because of it. HP's warranty policy is to replace the motherboard with the same faulty part.
  • Display all 34 comments.
  • 21 Hide
    Pei-chen , August 7, 2009 11:55 PM
    I can't wait to see Nvidia and ATI's DX11 cards. GTX200 and HD4000 series are getting boring.
  • 1 Hide
    Anonymous , August 8, 2009 12:24 AM
    So how did they define a 'loss'?
    A loss on the profit they are making?
    I think it's hardly possible for a company to keep on existing if they would actually sell their products with loss.
  • 14 Hide
    cabose369 , August 8, 2009 1:00 AM
    lol @ the pic of Nvidia GeFail!!!
  • -2 Hide
    IzzyCraft , August 8, 2009 1:01 AM
    So brand loyalty should be constricted to how they pack, and shipping company loyalties.

    At Prodigi
    Have you ever head of AMD :) 
    They are the poster child of loosing money and yet still around.
  • 8 Hide
    thepetey , August 8, 2009 1:03 AM
    my dell XPS M1330 has one of those fault ships, dell told me i "over used" my laptop and that the specific videocard cant handle "intense" gaming. HA! what a joke... CS 1.6 is hardly intense.
  • 2 Hide
    andy_newton , August 8, 2009 1:09 AM
    @ProDigit80

    Big companies like nVidia has cash reserves and that is why they can still be around despite recent losses.
  • 2 Hide
    andy_newton , August 8, 2009 1:12 AM
    @ thepetey

    Stop buying anything from any companies that does not respect our business. Does anyone know Apple's been extending the Ge-Fail 8600 GT related warranty to additional 2 years on top of original warranty for free?

    I hate the Apple superdrive but can anyone tell me how many other companies that does that as well?

  • 0 Hide
    salem80 , August 8, 2009 1:13 AM
    That's because the Huge die nVIDIA used
  • -1 Hide
    redgarl , August 8, 2009 1:21 AM
    Huang"Nvidia's business is recovering. Product demand is improving, and our strategic investments are leading to new growth," Huang said.


    Well, I don't know if he wanted to hint something, but he did. Look like ATI is well on track to get back at the number one spot.

    I think it could be the low blow from AMD for using Crossfire chips only for their AM3 platform.
  • 0 Hide
    IzzyCraft , August 8, 2009 3:21 AM
    Salem80That's because the Huge die nVIDIA used

    Yup compared to ATI which uses a smaller die they get more bang per big old tube of silicone, i get why nvidia doesn't change sizes too often bigger company takes a bit longer but I'm sure they can see how AMD is doing selling fat dies compared to intel a company who only loss in like the past 20 years is caused by a giant EU fine.
  • 7 Hide
    Zoonie , August 8, 2009 4:38 AM
    IzzyCraftYup compared to ATI which uses a smaller die they get more bang per big old tube of silicone, i get why nvidia doesn't change sizes too often bigger company takes a bit longer but I'm sure they can see how AMD is doing selling fat dies compared to intel a company who only loss in like the past 20 years is caused by a giant EU fine.


    I can't believe you just wrote over 3 lines of text with 1 comma and no periods. Oh wait, you did finish it all off nicely with a dot.
  • -7 Hide
    IzzyCraft , August 8, 2009 5:42 AM
    I don't think with comma's and periods so why should i write any different periods are auto done i don't actually hit them usually.
  • 4 Hide
    1ce , August 8, 2009 10:22 AM
    loss: revenue - expenses < 0

    I don't see how that's complicated, their expenses were greater than the money they earned, so they have less money now than they did 4 months ago....a loss.
  • 0 Hide
    Shnur , August 8, 2009 1:31 PM
    Anyone ever heard of Nortel Networks? Their shares went from 100$/share down to 0.08$, but since they are the only ones that provide certain kind of telecom materials, they're still in "business"...
  • 0 Hide
    roofus , August 8, 2009 2:40 PM
    ProDigit80So how did they define a 'loss'?A loss on the profit they are making?I think it's hardly possible for a company to keep on existing if they would actually sell their products with loss.


    AMD/ATI has existed in that way only by much more staggering numbers for a long time now. They are still around in spite of their piss poor business model of under pricing their own wares for market penetration. I dont know they could survive a miss step like nVidia's here. Their margins are too thin.
  • 4 Hide
    Anonymous , August 8, 2009 7:18 PM
    Wow, It's amazing how you guys are so ignorant on what loss means.

    I'll break it down for you.

    For the quarter they had

    $776.5 million in revenue (that is the same thing as gross sales)
    $881.8 million in expenses (I don't know how to simplify the term expenses)

    Therefore...

    776.5 million revenue
    - 881.8 million expenses
    = they lost 105.3 million dollars.

    It's a pretty simple concept actually.
  • 0 Hide
    Anonymous , August 8, 2009 7:22 PM
    By the way it is not uncommon at all for companies to operate at a loss. The US car manufacturers have been losers for decades. They take on debt to keep operations going, or they raise more cash through secondary offerings etc or if they have enough cash on hand to hold them over until they turn a profit again they can just use the cash in the bank.

    By the way, I for the the financially illiterate this doesn't make sense, but profit and loss has absolutely nothing to do with cash, or cash flow. Nothing at all.
  • 1 Hide
    flatsix911 , August 9, 2009 4:25 AM
    IzzyCraftYup compared to ATI which uses a smaller die they get more bang per big old tube of silicone, i get why nvidia doesn't change sizes too often bigger company takes a bit longer but I'm sure they can see how AMD is doing selling fat dies compared to intel a company who only loss in like the past 20 years is caused by a giant EU fine.


    IzzyCraft, I hope you are kidding and not a raving technology idiot ... Silicon is grown as a large crystal and sliced into wafers for chip fabrication ... Not squeezed from a
    Quote:
    big old tube of silicone

  • 0 Hide
    waffle911 , August 9, 2009 4:38 AM
    kevin555555...I for the the financially illiterate this doesn't make sense, but profit and loss has absolutely nothing to do with cash, or cash flow. Nothing at all.

    Ignoring the spout of illiteracy exhibited at the very beginning, that is exactly how loss and profit can be discussed in monetary units, i.e. CASH.
    Quote:

    Net Profit
    actual revenue after expenses in a given period of time

    Net Loss
    The operating result when expenses exceed revenues for a given period.

    Taken from a financial dictionary.
    So in other words, they have EVERYTHING to do with cash and overall cash flow. Net loss = losing money, or negative cash flow. Everything.
    So that's two counts of illiteracy in different categories from someone claiming to provide clarification on the financial meanings of profit and loss.
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