Intel have announced that a glitch in one of the support components for Sandy Bridge is expected to cause losses of $700 million thanks to replacements and around $300 million in loss of expected sales.

The issue is in a component code-named Cougar point that was part of 6-series chipsets like P67 and H67. A flaw in the design inside it negatively affected performance for devices that were hooked up to the SATA ports, such as hard and optical drives. Intel estimate the degradation to level out at around six per cent over a three year period.

$1 Billion has got to hurt

Intel have halted shipments of the chipsets and will release a fixed version by the end of February. However, Sandy Bridge processors will not work without motherboards bearing these chipsets, so that is expected to cause the company severe losses. However, with the first generation of Core processors still going strong, Intel are expecting to hold out. There will be delay of further Sandy Bridge processor shipments, which is understood as a period of a few weeks.

Since Sandy Bridge processors shipped during Q4 2010 and launched in Q1 2011, Intel have had to adjust their revenue predictions severely. Q4 2010 margins were adjusted by 4 whole per cent to 63%, and Q1 2011 projections have now been upped to $11.7 billion plus or minus $400 million.

In what has been one of the biggest processor generation launches in recent times, it seems Intel screwed up. How a flaw like this got past their QA is baffling to say the least.

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