The IT Nerd

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.

Apparently there’s lots going on in the land of Nvidia this week. Not only did they deny having any plans for an x86 CPU, and deny that there’s anything wrong with the graphic chipsets, but now it The Register claims that they’re changing how their graphic processors are made. The Register claims to have uncovered what are called Product Change Notificatons which seem to indicate that Nvidia is quietly altering the manufacturing process of their graphic processors so that they can address their quality issues without anybody noticing. The gory details can be found here and here if you care to look for yourself.

I’ll say this one more time for those who haven’t been paying attention. If Nvidia has issues with their graphics processors, it’s time for them to come clean. Even if they don’t it would be a good idea to say something for no other reaons than to make this go away (or at least to reduce the chatter about it). Right now the company has a really bad rep based on speculation and their silence on the issue. I for one plan on recommending and buying ATI for no other reason that all of this might be accurate. One can assume that others feel this way as well. That is really bad news if you’re an Nvidia stockholder.

Then again, the costs of coming clean might be too high for them. In which case we can expect to see them disappering shortly.

Either way, this problem is going to get solved shortly one would suspect.

You’ll recall that when this rumor first appeared, I said that Nvidia wasn’t going to come out with an x86 CPU for a variety of reasons. Now here’s the official word from Nvidia themselves:

But speaking to PC Pro, Chris Malachowsky, another co-founder and senior vice president, was unequivocal.

“That’s not our business,” he insisted. “It’s not our business to build a CPU. We’re a visual computing company, and I think the reason we’ve survived the other 35 companies who were making graphics at the start is that we’ve stayed focused.”

He also pointed out that such a move would expose the company to fierce competition. “Are we likely to build a CPU and take out Intel?” he asked.”I don’t think so, given their thirty-year head start and billions and billions of dollars invested in it. I think staying focused is our best strategy.”

So there you go. It’s not happening. End of rumor!

Of course the ongoing circus with their defective graphics chipsets that they deny are defective might be another reason why they wouldn’t get involved making an x86 CPU. But that’s just likely accurate speculation on my part.

You knew this was coming. Nvidia has denied that there’s anything wrong with their GPUs. You know, the ones that have been failing right left and center much to everybody’s frustration?:

“NVIDIA flatly denied it, saying that only a small batch of parts delivered to HP was affected by the problem.”

Oh really? Then explain this Nvidia:

“Of course, now other notebook manufacturers like Dell and ASUS are also affected. In fact, practically all notebooks using these GPUs are affected by the problem.”

They don’t of course (or at least they haven’t yet). Of course they do the only thing they can which is blame someone else for the issue. Then only thing is, that doesn’t come off well either:

“As much as NVIDIA would like to lay the blame on TSMC (the guys who actually fabricated the GPUs for them), the fabrication process is NOT the cause of the problem. After all, TSMC makes a lot of other chips for other companies using the same process. You do not see their other clients facing the same problem. Obviously, the problem lies closer to home.”

I’ve said it before. Nvidia needs to get a clue and deal with this straight up. Their stonewalling and denials have made me not consider them as an option the next time I need a graphics card or if I am buying a pre-built computer. I know others who feel the same way. In the end, dealing with it will cost less than just denying that the issue exists.

The Inquirer is running a story that Nvidia is about to release an x86 processor to the world:

“THE HOT RUMOR going around IDF is one that we discussed a long time ago when Nvidia bought Stexar: that the company will do an x86 part.”

It makes sense. They have the ability to do that. But before you line up for one, consider this: Nvidia needs a license from AMD and Intel to come out with an x86 processor. The chances of that happening are pretty much zero:

“The problem NV has is that both major x86 players have a lock on the technology, and they don’t want any new players in the mix. VIA certainly has a nice part with the Nano, but they barely got out under the threat of a lot of legal fighting, and Nvidia certainly doesn’t have the x86 patent leverage VIA has. NV is basically locked out unless Intel and AMD both decide to be magnanimous, and we would not recommend holding your breath waiting for this to happen.”

Also, I think that Nvidia has other issues to deal with at the moment that may take its focus away from doing an x86 chip. So while this is an interesting rumor, I don’t see it happening.

The news might be worse than previously thought. According to The Inquirer, the desktop versions of the G92 and G94 chipsets are just as defective as the laptop chipsets that everyone is focused on:

“A little digging revealed what this, and more, is all about, and it’s far uglier than just the ‘notebook’ version. It seems that four board partners are seeing G92 and G94 chips going bad in the field at high rates. If you know what failures look like statistically, they follow a Poisson distribution, aka a bell curve. The failures start out small, and ramp up quickly – very quickly. If you know what you are looking for, you can catch the signs early on. From the sound of the backchannel grumblings, the failures have been flagged already, and NV isn’t playing nice with their partners.”

Nvidia has to step up to the table regardless of whether this is fact or not and clear this up once and for all. Users of their chipsets have the right to know if the Nvidia chipset they have in their computer is faulty or not. If they are, users of their products have the right to a speedy replacement with a part that works. If Nvidia doesn’t do that and these chips are faulty, then they deserve to be run out of business.

It’s truly that simple.

As I’ve reported on two occasions previously, Nvidia has had a major problem with the laptop versions of the 8400 and 8600 series graphics processors. Now some actual numbers are coming out about the number of laptops affected. The number is as many as 18 million. Where do I get this number from? Check out this Register story about the numbers and the costs involved. It’s a very interesting read.

Now say you’re HP or Dell or anybody else, what do you do? BIOS updates that turn the laptop fan on more frequently or permanently have been released by Dell and HP. Great. But all that means is that the graphics chip that fails because of overheating issues is cooled a bit more. Thus pushing the problem out until after the warranty expires, and at that point it becomes a source of revenue. Not only that, but that laptop is going to be really noisy.

As for Apple who uses these chipsets in the MacBook Pro line of notebooks, there’s ample evidence to indicate that they have issues as well. Curiously, Apple hasn’t come out with any sort of kludge fix of any sort like HP and Dell have. Therefore Apple laptop owners may be visiting the temple of Steve Apple Store Genius Bar in the near future for a repair. I hope they bought AppleCare.

All I have to ask is this, where does the queue for the forthcoming class action lawsuit begin? Because you know one is coming.

UPDATE: A MacBook Pro User sent an e-mail to “The Steve” on this issue and actually got a response claiming that he thinks the chips used in the MacBook Pro notebooks are fine.

You’ll recall that I posted a story about Nvidia having a problem with their mobile graphic chipsets and having to take up to a $200 million charge as a result. Well, here’s a plot twist that I didn’t expect:

• The Inquirer (an IT news website based in the U.K.) has claimed that “The short story is that all the G84 and G86 parts are bad. Period. No exceptions. All of them, mobile and desktop, use the exact same ASIC, so expect them to go south in inordinate numbers as well. There are caveats however, and we will detail those in a bit.” Click here to read the full story.
• Ars Technica asked Nvidia to comment on what The Inquirer. Their comment was “As a result, it is very unlikely that your NVIDA based notebook product is affected.” The story then goes on to point out that if the Inquirer claims are true, then Nvidia is comittng fraud. Click here for more.

So, are these chipsets bad or not? I’ll guess we’ll wait and see. If they are bad in huge numbers, it’s a safe bet that $200 million won’t cover it. Or a bunch of execs are going to get perp walked if things go really bad.