Thursday, September 11th 2008
NVIDIA Sued Over Faulty GPUs
Graphics card manufacturer NVIDIA is being sued for withholding information over defect GPUs and thus causing investors to lose money. NVIDIA shareholder Lisa Miller has filed the suit in the US district, seeking for legal action against NVIDIA. The lawsuit alleges that the company knew of the problem last year, but didn't disclose the issue to shareholders. Earlier this summer NVIDIA by its own admitted that it had a problem with faulty GPUs indeed. In July NVIDIA confirmed that there's a thermal problem with its GPUs. The problem is in the thermal stress caused when the chip powers up and then powers down. The difference in temperature caused the solder attaching the chips to crack and fail. After the issue was made public it led to an immediate stock reaction. The company's share price fell 31% from $18.78 USD to $12.98 for one night, effectively wiping $3 billion off the company's and shareholders' pockets in less than 24 hours. If NVIDIA tries to cover the cost of repairs and returns for the faulty GPUs, it would cost up to $200 million. Because of the obvious losses, the shareholders now want some compensation that needs to be paid by NVIDIA. "The truth is that, at least as early as November 2007, NVIDIA and the other defendants have known about these unprecedented failure rates as well as their 'root causes'," the lawsuit claims. "Nevertheless, for at least eight months, defendants concealed from NVIDIA investors these defects and their obvious impact on the company's financial condition and future business prospects," it adds. Till the moment of this release, there is still no official response from NVIDIA. You can find the full lawsuit in .pdf format here.
Source:
PC Pro
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