Nvidia Takes $119.1 M Charge for Faulty GPUs

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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.

Marcus Yam
Marcus Yam
Marcus Yam served as Tom's Hardware News Director during 2008-2014. He entered tech media in the late 90s and fondly remembers the days when an overclocked Celeron 300A and Voodoo2 SLI comprised a gaming rig with the ultimate street cred.
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34 Comments Comment from the forums
  • NewJohnny
    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.
    Reply
  • Pei-chen
    I can't wait to see Nvidia and ATI's DX11 cards. GTX200 and HD4000 series are getting boring.
    Reply
  • 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.
    Reply
  • cabose369
    lol @ the pic of Nvidia GeFail!!!
    Reply
  • IzzyCraft
    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.
    Reply
  • thepetey
    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.
    Reply
  • andy_newton
    @ProDigit80

    Big companies like nVidia has cash reserves and that is why they can still be around despite recent losses.
    Reply
  • andy_newton
    @ 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?

    Reply
  • salem80
    That's because the Huge die nVIDIA used
    Reply
  • redgarl
    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.
    Reply