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Lawsuit Claims Nvidia Execs Concealed Serious Flaw
snydeq writes "A lawsuit filed in a California court on Tuesday alleges Nvidia concealed the existence of a serious defect in its graphics-chip line for at least eight months 'in a series of false and misleading statements made to the investing public.' The lawsuit contends that Nvidia CEO Jen-Hsun Huang and CFO Marvin Burkett knew as early as November 2007 about a flaw that exists in the packaging used with some of the company's graphics chips that caused them to fail at unusually high rates. Nvidia publicly acknowledged the flaw on July 2, when it announced plans to take a one-time charge of up to $200 million to cover warranty costs related to the problem. That announcement caused Nvidia's stock price to fall by 31 percent to $12.98 and reduced the company's market capitalization by $3 billion, the lawsuit said. The lawsuit seeks class-action status against Nvidia and unspecified damages."
I had an nVidia 8800GT card fail prematurely early this summer. I was pleased with its performance, other than the failure, so I picked up the newer version of the same card, from a different manufacturer. Unfortunately that was the middle of June :(
So odds are high that this card is going to die early too. And of course I don't have receipts for either card at this point, but if there's a chance at recouping some of my investment, I'd sign up.
-Rick
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
IANAL, but different parties can sue, I think.
Manufacturers of machines can sue for damages to reputation, warranty costs, etc.
Investors can sue for lost of investment, since it wasn't, in any way, a market force that caused the loss of value.
Those who got the chips in machines can sue for damages too, I bet.
Frankly, this whole fiasco just strengthened my love for ATI. Their newer binary blobs are amazing.
Show this to your friends and family that don't know what a real hacker is
This kind of lawsuit is what's supposed to make "capitalism" work ... corrupt businesses being actually held accountable for shady dealings.
I hope it bankrupts them.
"Frankly, this whole fiasco just strengthened my love for ATI. Their newer binary blobs are amazing."
Quick! Someone frame the above. I never thought I'd see the day when someone said something nice about ATI drivers.
You must be new, I've said that quite a few times.
Seriously, though, they're more stable now, and they get fairly frequent updates.
Show this to your friends and family that don't know what a real hacker is
"Their newer binary blobs are amazing."
So long as you don't want to run two X servers on two VTs.
Go green: turn off your refrigerator.
These stories keep on referencing the packaging being at fault...
Now I'm no electrical engineer but when you take a working chip and put it in a machine it seems a little odd to blame the packaging it came out of for higher than normal failure rates if it works initially.
Maybe "packaging" refers to the way the actual chips are placed into the material around them? Although it seems like a very odd way of wording it as to me packaging implies something that is discarded.
If someone could explain in non-layman's terms what exactly the problem was I would much appreciate it.
No one knows for sure, and Nvidia isn't telling. The Inquirer says practically all of them, but their author has a history with Nvidia so there's quite a potential for bias there. The running theory is that the problem is due to thermal properties of a substrate material. This substrate material supposedly expands and contracts at a different rate than surrounding material in the chip package. Over time, this stresses the silicon or solder points, eventually causing a failure of the part. Laptop parts are definitely affected, you only need to look in notebook manufacturers forums and you'll see an incredible number of posts from owner of notebooks with, for example, 8600 GT mobile parts.
Desktop parts may also be affected, since they're all based on the same core silicon with (supposedly) the same substrate materials. It's possible that the problems aren't as apparent (at least not yet) due to the different thermal conditions you'd see in a tower chassis compared to a notebook. The very popular 8800GTs out there may start failing en masse in three months, six months, a year's time, or maybe never. Because Nvidia won't specifically say which parts are affected, whether it's all the parts or only certain manufacturing runs, etc., we have only speculation and rumor to go on.
Actually their latest drivers are pretty dang good. Plus nVidia had a bunch of driver issues as well not long ago.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
[stockholders are] being punished for investing in a company that lied about shit products.
Have you seen the markets the last couple weeks? There must some big crapload of companies out there who lie about shit products.
... oh wait.
If libertarians are so opposed to effective government, why don't they all move to Somalia?
If nVidia is spending $200 million to cover these faulty items under the warranty, then why file a law suit? If your card is out of warranty, then nVidia has no legal obligation to fix it. That's what a warranty means. It might be frusrating, but if they warrant the item for 1 year and it fails in 3 years then I don't see why they are liable.
Of course, I have one of these bad chips in my MacBook Pro, so hopefully it will fail within the 2 and a half years I have left and they will fix it. If not, I'll be crying too - but probably not suing.
Psh...AC isn't new. You must be new here!
1. A dirty little secret of all governments, the USA included, is that they _can't_ get rid of unemployment or inflation, and they're actually trying to keep both where they want them. There's this funny little hyperbolic-looking curve called the Phillips Curve, which ties inflation to unemployment. If you even tried to push one to zero, the other rises sky-high.
So the best any government can do is to keep both at a point they can live with. Exactly what that point is, that's a matter of political debate and position, but everyone tries to do that. A mean most used is the interest rate. That's what the federal reserve does in the USA, but other countries have their own similar institutions.
(The corolary being that any politician which harps on unemployment and inflation as proof that his opponents are evil, or worse yet, promises to really solve either or both, is himself a liar and has no scruples telling you lies to gain power.)
So, yes, a bunch of people without jobs _are_ what makes the economy work. (A capitalist economy included.) Because without those, you'd get a hyperinflation comparable to interwar Germany. (Just as a comparison point, not saying that that's the same cause.) And conversely, if anyone actually managed to eliminate inflation, like some idiots demand, most of you would be out of job.
2. Well, actually, the reluctance to make people change jobs was arguably one of the (several) reasons the Soviet economy colapsed. They were very reluctant to kick people out of a job, since the whole theory was that everyone should be given a job in communism. So if they made a hammer manufacturing company, and 20 years later there would be more of a need for wrenches, they'd still keep a bunch of people there making hammers, just so they don't kick them out and tell them to find another job. It's not the only factor, of course, but worth thinking about.
Or seen at another level, they wanted to eliminate both the unemployment _and_ inflation (via price controls) which had the same devastating results as when it had been attempted before. If both can't take their natural positions on that curve, something else has to give. In their case, productivity went down instead, and corruption went out of hand. Which effectively is another way to get inflation, only in a much more destructive way.
3. The whole thing about capitalism and the free market is that it's an optimization algorithm. It's really a genetic algorithm, based on semi-uninformed trial and error. The "genes" (processes, ideas, products) which are closer to optimal survive and are copied by others, and the process repeats, moving it all closer to the optimum. The genes which lost, and the companies which bet on them, die. Sometimes spectacularly, leaving a bunch of people temporarily unemployed.
That's how it's supposed to work. Bit wasteful, no doubt, and stressful for those who end up looking for a new job. Scott Adams of Dilbert fame (who, I might add, is actually trained as an economist, so he might understand these things) claimed in a blog post that it's "harnessing the power of stupidity" and that at any given moment, 80% of society's resources are pushed off a cliff by idiots. But somehow it seems to work better than anything else we've tried. Trying to prevent that optimization cycle from happening, deviates from optimum very quickly, and produces even worse results.
It _is_ what makes capitalism work.
A polar bear is a cartesian bear after a coordinate transform.
The class is stockholders not consumers. Unless you hold/held stock in Nvidia in the timerange, you won't see anything.
And why would anyone mod you up for what is common knowledge?
With 0% unemployment, there's no one to hire when new jobs open up or current employees need replacing.
Nothing secret about it, just a little common sense.
To quote LongNoi "QZTR was right and won't leave me alone because I called him a moron when I was wrong" FYS
You can trust individuals, yes, but regardless of the pernicious doctrine of corporate personhood, that's as far as you should go. Corporations are basically required by law to behave in an untrustworthy way, and even if the individual at the helm of the corporation is trustworthy there are limits to how far they can carry their intentions (however good) through.