“It hasn’t hurt us in terms of getting new design wins at all. None of the OEMs [original equipment manufacturers] held that against us or anything,” said Ujesh Desai, vice-president of product marketing at Nvidia, speaking on the sidelines of the Computex exhibition in Taipei last week.<\/p>\n
“These are pretty complex devices and things happen every once in a while,” he adds.<\/p>\n
Nvidia took a one-time $196-million charge last year to cover warranty and product replacement costs associated with faulty graphics chips.<\/p>\n
In March, a filing with the US Securities and Exchange Commission revealed that Nvidia spent $43.6-million of that amount during its previous fiscal year.<\/p>\n
Nvidia’s customers include Apple, Dell, Hewlett-Packard and Acer, among others.<\/p>\n
Despite the packaging material problem that emerged last year, demand for Nvidia’s laptop graphics chips remains strong and is growing.<\/p>\n
“Our connect rate on notebooks is going up for graphics and I think it’s going to go up even more this year,” Desai says.<\/p>\n
Besides taking the one-time charge to cover additional warranty costs, Nvidia also released a software update that causes laptop fans to run more frequently to reduce thermal stress on the chips.<\/p>\n
Nvidia also started using an improved material package that fixed the problem.<\/p>\n
Nvidia’s quick response to the problem helped to ensure that its relationships with the OEMs remains strong, Desai adds.<\/p>\n
“As a company, I think we stepped up and we did a good job with how we handled that. Our customers appreciated how we handled that,” he concludes.<\/p>\n