While NVIDIA still holds a tenuous grip on the highest
end offerings, with its GeForce GTX 280 GPU, this might soon slip,
depending on the performance of AMD's dual processor 4870 X2 (R700) card,
likely coming in Q3 2008. Meanwhile, NVIDIA faces challenges
from Intel in its low-end and laptop graphics offerings, and from AMD's
PUMA chipset/graphics package in the laptop market.
The economic repercussions
of NVIDIA's slippage are already visible. NVIDIA announced yesterday
that it was going to turn in revenue of $875 million to $950 million for Q2
2008, which ends July 27. This is significantly
lower than the current analyst expectations of $1.1 billion.
That was not the end of the bad news from NVIDIA either. It announced
that it was facing a massive recall, due to overheating GPUs in notebook
computers. NVIDIA reported higher than average failures in both the
laptop GPUs and in laptop chipsets.
NVIDIA said that the chips and their packaging were made with materials that
proved to be too "weak". NVIDIA passes the blame to notebook
manufacturers, which it says contributes to the problem. Typically
notebooks have poorer ventilation and components concentrated in a smaller
space than desktop computers.
The result of the recalls is that NVIDIA will be taking a onetime charge of
$150M USD to $200M USD to cover the damages. It plans to use the money to
repair or replace defective parts. It also hopes to collect part of the
money from insurers it uses. However, it has acknowledged its problems
and switched the materials it uses.
The news has resulted in NVIDIA taking a beating on the stock market, sliding over
quote: NVIDIA passes the blame to notebook manufacturers, which it says contributes to the problem.
quote: Regarding the notebook field failures, NVIDIA president and CEO Jen-Hsun Huang stated:-"Although the failure appears related to the combination of the interaction between the chip material set and system design, we have a responsibility to our customers and will take our part in resolving this problem. The GPU has become an increasingly important part of the computing experience and we are seeing more interest by PC OEMs to adopt GPUs in more platforms. Recognizing that the GPU is one of the most complex processors in the system, it is critical that we now work more closely with notebook system designers and our chip foundries to ensure that the GPU and the system are designed collaboratively for the best performance and robustness "
quote: This has been a challenging experience for us. However, the lessons we've learned will help us build far more robust products in the future, and become a more valuable system design partner to our customers. As for the present, we have switched production to a more robust die/package material set and are working proactively with our OEM partners to develop system management software that will provide better thermal management to the GPU