Nvidia Slashes Forecast (Update)

SAN FRANCISCO -- Nvidia(NVDA Quote) cut its financial forecast for the current quarter, and disclosed that defects in certain graphics chips would result in at least $150 million in charges.

The Santa Clara, Calif., chipmaker said it now expects sales in the quarter ending July 27 to range between $875 million and $950 million. That represents a 17% to 23% sequential drop in sales, compared to the 5% falloff to $1.09 billion in quarterly revenue expected by analysts polled by Thomson Financial.

Nvidia also said its gross margin would be lower than previously indicated. In May, Nvidia said it expected its gross margin to increase by at least one percentage point from the first quarter's 44.6% level. ...