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It Pours on Nvidia
Techtree News Staff, Jul 12, 2008 0730 hrs ISTNvidia's shares continue their tumble over product recall, increased competition and a patent suit
Nvidia's shares continued their tumble over the week.
On July 3, Nvidia's shares plunged just over 30 percent, and prices have continued to fall.
The fall in their stock prices was triggered by a product recall of Nvidia's notebook chips. While the company did not elaborate then, it was recently revealed that all its G84 and G86 parts are affected by the product defect. This new information means that the defects affect both desktops and mobile solutions; notebooks from manufacturers such as Apple, HP, and Lenovo would need to be recalled over the issue. Anywhere between $150 million to $200 million would need to be spent to cover the windfall of repair and replacement costs, Nvidia stated.
The company is also facing stiff competition from AMD: the HD 4800-series has an impressive price-performance ratio which has forced Nvidia to quickly drop prices for its recently unveiled, and costly to manufacture -- GT260 and GT280 chips. To make matters worse, Rambus recently sued Nvidia over 17 patents -- over memory controllers for synchronous dynamic random access memory (SDR) and double data rate memory (DDR, DDR2, DDR3, GDDR, and GDDR3).
On July 3, Nvidia's shares plunged just over 30 percent, and prices have continued to fall.
The fall in their stock prices was triggered by a product recall of Nvidia's notebook chips. While the company did not elaborate then, it was recently revealed that all its G84 and G86 parts are affected by the product defect. This new information means that the defects affect both desktops and mobile solutions; notebooks from manufacturers such as Apple, HP, and Lenovo would need to be recalled over the issue. Anywhere between $150 million to $200 million would need to be spent to cover the windfall of repair and replacement costs, Nvidia stated.
The company is also facing stiff competition from AMD: the HD 4800-series has an impressive price-performance ratio which has forced Nvidia to quickly drop prices for its recently unveiled, and costly to manufacture -- GT260 and GT280 chips. To make matters worse, Rambus recently sued Nvidia over 17 patents -- over memory controllers for synchronous dynamic random access memory (SDR) and double data rate memory (DDR, DDR2, DDR3, GDDR, and GDDR3).
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