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Intel's $1 Billion Bug

If you had your eyes set on any number of new notebooks based on Intel's Second Generation Core processors code-named Sandy Bridge, you're going to have to wait a few months. And if you or any of your customers already have one of the few that have shipped, you may want to return it.  Intel this week abruptly halted production of systems based on the company's Second Generation Corei5 and Core i7 quad-core processors. 

It is the costliest glitch in the company's history, surpassing a flaw in the original widely publicized Pentium processor that led to a $475 million write-off in 1995, according to The Wall Street Journal. This time around, Intel is putting aside $700 million to fix the problem and has is reducing its revenue forecast by $300 million as a result of the new flaw putting the total cost of the flaw at $1 billion.

The problem lies with a support chip called the Intel 6 Series, code-named Cougar Point. Intel said the Serial-ATA (SATA) ports in the chipsets could potentially degrade thereby impacting data throughput if devices linked via the SATA interface such as hard drives and DVD drives.

Intel said it has halted shipment of the support chip and has fixed the design problem and is already manufacturing a new version of the chip. The Sandy Bridge processor itself is not affected, nor are any other products, Intel said. The company expects to start shipping the updated chipset within a few weeks and expects to resume normal production in April.

The news has already had an impact on key PC manufacturers. Hewlett-Packard Co. has postponed a media briefing scheduled for next week when it was to unveil new notebooks based on the Sandy Bridge processors. According to a Bloomberg report, the flaw is impacting other PC makers including Samsung, NEC and Dell.

Posted by Jeffrey Schwartz on February 03, 2011