The design error in Intel’s latest processor, called Sandy Bridge, will cost it $1 billion in missed sales and expenses.
The error will impact first-quarter revenue by $300 million and the the company will spend $700 million to replace potentially faulty chips and systems.
Intel said it has corrected the flaw and begun manufacturing a new version of the chip that will resolve the issue.
“Is it going to be a near-term distraction and something for investors and customers to gripe about? Absolutely,” said Craig Berger, an analyst at FBR Capital Markets in New York. “But the stuff is relatively new. There are probably not many of them out. That’s helping them mitigate losses.”
Intel said it expects to begin delivering the updated version of the chipset to customers in late February. Intel has shipped about 8 million of the chips to customers.Channels: intel, sandy bridge