Last week, Dell announced it was going to take a $300 million financial charge on its earnings to cover costs associated with the replacement of motherboards with faulty capacitors in some of its Optiplex workstations. The Dell system boards in question were manufactured from April 2003 to March 2004, according to several contract computer repair firms that are starting to replace the systems.
The Round Rock, Texas, computer maker is expected to provide more details during its quarterly earnings call on Thursday.
When capacitors go bad, computers get crippled. Faulty capacitors have caused video failure and periodic system shutdowns in some Dell PCs, first-generation Apple iMac G5s and other computers.
Think you might have a cap problem? Look for swelling on the tops and along the base of the capacitors. If there is a brownish substance oozing from the bases, check your warranty and contact your computer company.
As Dell executives deal with the fallout from the bad capacitors, they can at least take some comfort in knowing they are hardly the only big PC makers to have dealt with the problem. In fact, PCs from Hewlett-Packard and Apple Computer and other PCs using Intel motherboards have all faced similar issues, according to the companies, contractors and several online bulletin boards.
At issue are faulty capacitors on motherboards that store power and regulate voltage. Defective capacitors found in the Dell Optiplex workstations, some Apple iMac G5s, HP xw-series workstations made in 2004 and PCs with the Intel D865GBF motherboard have been found to bulge, pop, leak and crust over, causing video failure and periodic system shutdowns.
Photos showing Dell's Optiplex GX270 and Optiplex GX280 with defective capacitors have been widely reported on Web sites such as Badcaps.net, PowerEdgeForums.com. Pictures of other faulty capacitors have been spotted on Apple's own discussion boards, MacOSG.com, and G5Support.com.
Dell declined to identify any of its component suppliers but did say that despite periodic system shutdowns, data loss was not a factor in the workstation PCs with the faulty capacitors. Representatives with Apple and Intel also declined to comment on parts inside their systems.
Only HP would identify the maker of its faulty capacitors: Nichicon, of Kyoto, Japan.
A spokesman at Nichicon's North American offices in Schaumburg, Ill., declined to comment. Repeated phone and e-mail requests for comment from the main office in Kyoto were not returned.
Nichicon, which has been in the business of making capacitors for 50 years, has a strong track record, and the majority of Nichicon's products have no problems at all, HP representatives and enthusiast sites said.
This is hardly the first time a bad capacitor problem has popped up. Three years ago, in what appears to an entirely different situation, an industry-wide problem was reported by Passive Component magazine. The publication unearthed a problem with capacitors made by several Taiwanese manufacturing companies.
The bad capacitors--or "bad caps" as they are sometimes called--are black and gold-colored low-ESR (equivalent series resistance) aluminum electrolytic cylinders about an inch in length and marked HN(M) and HM(M) on the side with a letter "X" stamped on the top. The capacitors are found in some motherboards, video cards and power supplies for PCs, monitors, video tape players and televisions.
Various postings on message boards claim the trouble was caused by capacitors that were overfilled with a liquid electrolyte that helps the component protect the processor from excess power; convert energy from 5 volts to around 1.5 volts; and deal with current surges. The PC makers have not confirmed that that was the problem.
Experts say that if capacitors are not made right, they start to deteriorate after three or four years, rather than lasting the expected seven years. Underpowered power sources, excessive heat from the computer or outside temperatures, and putting extra strain or overclocking the processor are other causes for premature capacitor failure. Dell does not have a long history of PCs with capacitor problems.
How widespread is the problem?
Matthew Wilkins, a senior analyst with iSuppli, said it is hard to estimate what companies may spend on the problem, but there are clues.
"When the size of the financial implications potentially causes a major vendor to miss their quarterly guidance target (like Dell), a comment needs to be made," Wilkins said.
Blandon Ray, who used to work as a network engineer and administrator at a major university health care organization in Washington, D.C., began experiencing a rash of system board failures in Dell Optiplex GX270s around February 2005 that required service techs from Dell to swap out the system boards.
"After awhile we started to notice that all of the systems were from the same group, purchased around the same time," he said.As more systems started failing, Dell began replacing the motherboards with "no questions asked," Ray said.
Members of Dell's Community Forum pages also spotted a bad capacitor problem with Optiplex machines in February 2005. The faulty machines caused "intermittent shutdown, thermal shutdown, and video failure."
Of the $300 million that Dell will spend to fix the problem, Wilkins estimates that half of that figure will go to replacing the motherboards entirely. He attributes the rest to the logistics of determining whether a system is in need of replacement.
Paul Kamberis, who owns a small computer repair operation in Virginia, started seeing problems with PCs in January. Frequent "Blue Screens of Death" and random programs that crashed on new systems raised red flags until he opened up the back of the computer.
"The only common factor was the blown capacitors," Kamberis said. "I could wipe out the hard drive and do systems rebuild and still have that problem." Kamberis noted that he's seen three other boards with the same problem this year.
Faulty capacitors were attached to Intel D865GBF motherboards, which are sold to computer manufacturers and in some electronic retail stores, Kamberis said.
Intel spokesman Bill Kircos declined to comment on the chipmaking giant's motherboards, noting that "capacitor problems are not new, can occur frequently and can be a result of an almost infinite amount of scenarios or environmental things...and are not unique to any single manufacturer, semiconductor maker."
Intel, which regularly updates its reseller partners, has acknowledged previous problems within the capacitor manufacturing industry and has an advisory posted on its site talking about electrolytic capacitor leaks on some 875-based and 865-based desktop motherboard products.
Representatives with Apple also declined to comment on any reports of capacitor problems found in its iMac G5 line.
In August, Apple issued a limited recall of some of its first-generation iMac G5 models sold between approximately September 2004 and June 2005 featuring 17- and 20-inch displays with 1.6GHz and 1.8GHz G5 processors. The official cause was blamed on an unnamed "specific component failure."
Oliver Kreuzenbeck, who bought his original iMac G5 in the end of November 2004, said he was baffled as to why his iMac display flickered every couple of seconds--until he read postings on Apple's forums and decided to open up the machine.
Similar complaints discussed on Apple discussion boards and computer enthusiast sites blamed bad capacitors for scrambled or distorted video, as well as power problems. Apple did not disclose any financial output to deal with the problem.
Hewlett-Packard took its own steps to rectify the problem. Company spokeswoman Nita Miller said HP found a small number of its PCs with similar capacitor problems.
"As of March 1, 2004, HP suspended shipment of all products built with this capacitor, and purged all inventory of the capacitors in question. No systems built after March 1, 2004 will be affected," HP said in a statement. The company did not report any capacitor-related expenditures in its last two earnings statements.
While replacing the individual capacitors and even the entire motherboard has proven an effective way to solve the bad-cap problem, experts say it is critical to make sure that you not misdiagnose your motherboard. Doing so could lead to permanently damaging your computer.
Ultimately, if there is a problem with your capacitor, William Walsh, a forum moderator at BadCaps.net, suggests that you check your warranty and contact your computer company.