Nvidia has found that "significant quantities" of older graphics cards that shipped in notebook PCs were defective. Nvidia says it has not determined the exact cause of the problem, but it is associated with a packaging material used with some of the chips, and the thermal design of some notebooks. Nvidia will introduced a software driver that will cause the cooling fan in a notebook to spin sooner to make the chips run cooler, reducing stress on the chips. The products have been failing at "higher than normal rates."
The company has taken significant hits in the stock market, seeing its stock drop about 30%. The expected repair/replacement costs will total between $150 and $200 million, which it will take against its second quarter earnings. There are no specifics as to which products were affected, except for the fact that they are graphics cards and media and communications processors. To top everything off, Nvidia has lowered is second quarter earnings forecast.