Nvidia cites chip fix payments, nixes large event

A filing with the SEC makes note of more than $40 million in payments to cover costs associated with graphics chip defects. Separately, Nvidia cancels a major conference.

Updated at 1:20 p.m. PDT with correction about the extent to which the Nvision conference is being scaled back.

Nvidia paid out $43.6 million to cover costs associated with graphics chip defects in its 2009 fiscal year, and in a separate development, a spokesman said Monday the company has no plans this year to hold the large-scale Nvision conference that it hosted last year.

In a Form 10-K filing with the Securities and Exchange Commission, Nvidia said it paid $43.6 million in fiscal year 2009 "in deductions towards warranty accrual associated with incremental repair and replacement costs from a weak die/packaging material set." IDG News Service reported this earlier.

On July 2 of last year, Nvidia announced it was planning to take a one-time charge to cover costs associated with problems with materials used in certain versions of its laptop graphics chips. Subsequently, a $196 million charge was recorded in the second quarter of its 2009 fiscal year to "cover anticipated customer warranty, repair, return, replacement and associated costs" with the problem.

As early as 2007, Hewlett-Packard listed laptop models affected by the graphics chip glitch. In August of 2008, Dell also listed affected models. And Apple said in October that it would repair faulty graphics chips. There have also been recent reports of Nvidia graphics chip issues with Apple's new MacBooks, though Apple, to date, has not confirmed that these alleged issues exist.

Related to the other Nvision development, Nvidia spokesman Derek Perez said the company "has no plans" to host the kind of large-scale Nvision conference that it held last year at the San Jose Convention Center in San Jose, Calif. "With travel dollars shrinking and the economy affecting people's ability to travel, we've changed the plan this year," he said. Nvision will be a series of smaller developer events that are "more focused," he said.

Last year was the first year the company held the conference.

This was reported earlier at Taipei-based technology news site DigiTimes.

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