This past week Intel found a design flaw in their new Sandy Bridge processors. This is potentially the beginning of a story that could cost Intel a Billion dollars. Yes, I said a billion dollars. The damage to the reputation that Intel already has experienced could be even greater.
What makes this news of even greater importance is that Intel are in a fight against its traditional competitor (AMD) and an upstart called ARM. The company’s relationship with Microsoft can no longer be seen as strong and profitable.In a press release Intel provide details as to the extent of the flaw:
“Intel Corporation has discovered a design issue in a recently released support chip, the Intel 6 Series (and the Intel C200 Series Chipset), and has implemented a silicon fix. In some cases, the Serial-ATA (SATA) ports within the chipsets may degrade over time, potentially impacting the performance or functionality of SATA-linked devices such as hard disk drives and DVD-drives.”
Analysts have said that they believe this will have little effect in the long run for Intel. I disagree. Product recalls do damage to any brand. Just think about Toyota and BP and all the drama that they encountered. It is far from pretty and the brand is under the microscope until the issue is resolved. This is not the first time that Intel has had a product design flaw. In 1995 they had to write off $475 million due to a glitch with the Pentium range.
What makes the situation very difficult to manage is that no software update will change the problem. The processors need a metal layer change which is a costly process. I expect to see AMD to use this disaster as a PR campaign to drive users to them. Let the games and PR spin begin as Intel try to save the day.
