Quanta sues AMD over defective chips

The world's largest laptop manufacturer sues AMD for breach of contract over defective chips used in an NEC device.

Quanta has sued Advanced Micro Devices over a defective chip used in an NEC laptop.

Quanta Computer, the world's largest contract manufacturer of laptop computers, sued AMD for breach of contract, alleging the chipmaker sold defective products, as first reported by Bloomberg.

The suit is centered on the ATI RS600ME, an integrated graphics solution, an AMD spokesperson told CNET. Integrated graphics chips include other circuitry and also act as a chipset, which supports the main central processing unit or CPU.

"AMD and its ATI Technologies Inc. unit sold chips that didn't meet heat tolerances and were unfit for particular purposes," Bloomberg said, citing the complaint. The case was filed yesterday in a federal court in San Jose, California.

The chips were used in notebooks Quanta made for NEC and caused the computers to malfunction, Bloomberg said.

"Quanta has suffered significant injury to prospective revenue and profits," the company said in the complaint, according to the Bloomberg report.

"AMD disputes the allegations in Quanta's complaint and believes they are without merit. AMD is aware of no other customer reports of the alleged issues with the AMD chip that Quanta used, which AMD no longer sells. In fact, Quanta has itself acknowledged to AMD that it used the identical chip in large volumes in a different computer platform that it manufactured for NEC without such issues," AMD said in a statement.

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