Nvidia Slashes Forecast (Update)

An Nvidia spokesperson said Wednesday that he had no specific information about the price adjustments cited in the financial preannouncement.

Nvidia also disclosed Wednesday that certain of its graphics processors designed for notebook PCs were failing at higher-than-normal rates due to what it described as "weak die/packaging materials."

As a result, Nvidia will take a charge between $150 million and $200 million to cover anticipated customer warranty, repair and replacement costs.

Nvidia spokesperson Hector Marinez said the root cause of the problems have not yet been fully identified, but that it appears the chip packaging materials were not strong enough to handle the thermal requirements of certain notebook PCs.

"The material gets hot, cold, hot, cold, and develops a little bit of stress fracture and fail," Marinez said.

Nvidia said the problems were limited to older generation products, and that its newest products use different and more robust materials.

Still, the company said that there is no assurance that more defects will not be discovered in other products.

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