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Nvidia Sued Over Defective Chips…. Chickens Also Come Home To Roost

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Surprise! A lawsuit has been filed over Nvidia’s defective graphics chips. According to Infoworld:

“The lawsuit [Warning: PDF] charged that Nvidia CEO Jen-Hsun Huang and CFO Marvin Burkett knew as early as November 2007 about a flaw that exists in the packaging used with some of the company’s graphics chips that caused them to fail at unusually high rates.”

The lawsuit also alleges that Nvidia has violated U.S. Securities laws as well. Nvidia publicly acknowledged the flaw on July 2, when it announced plans to take a one-time charge of up to $200 million to cover warranty costs related to the problem. That announcement caused Nvidia’s stock price to fall by 31%  to $12.98 and reduced the company’s market capitalization by $3 billion. The lawsuit seeks class-action status against Nvidia and unspecified damages.

Sucks to be Nvidia, but I have to admit that Nvidia had it coming given the way they handled this whole mess.

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