Nvidia’s 10Q Sheds Some Light On How bad The Graphics Chips Mess Might Be

Many people think that reading the 10Q documents (AKA: their annual report) of major corporations is as dry as toast. But you can sometimes find some interesting tidbits in them. Take Nvidia for example. In their annual report, I note the following items. You might recall that Nvidia had set aside $150 – $200 million to deal with graphics chips that were failing at a obscene rate. Nvidia has spent $43.6 million so far according to their annual report. But the telling point is in this paragraph:

In September, October and November 2008, several putative class action lawsuits were filed against us, asserting various claims related to the impacted MCP and GPU products. Such lawsuits could result in the diversion of management’s time and attention away from business operations, which could harm our business. In addition, the costs of defense and any damages resulting from this litigation, a ruling against us, or a settlement of the litigation could adversely affect our cash flow and financial results.

Translation: If the people who filed these lawsuits win, we’re screwed.

That sort of implies that this whole graphics chips mess is a lot bigger than they are admitting to publicly. It’s hard to tell as the 10Q really dances around the issue to a great degree. But perhaps now is a good time for them to start repairing the damage that this circus has caused by manning up and dealing with it? It may be cheaper for them in the long run.

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