Intel is recalling an untold number of high-end desktop PCs because of a design flaw, and expects the problem to cost the company about $1 billion.The design flaw affects the Intel 6 (formerly codenamed Cougar Point) support chip, which rides alongside the Sandy Bridge processor on motherboards. The flaw could cause performance problems with devices connected via Serial ATA ports, such as hard drives and DVD drives.
The chip has shipped in desktop PCs only since January 9th, and only Second Generation Core i5 and Core i7 quad core based systems should be affected. Those are among the most powerful PCs available, and are used for running processor-intensive applications like video rendering. Notebooks use a different support chip, codenamed Huron Bridge.
Intel did not disclose the number of systems it expects to be affected.
Intel says its Q1 revenue will be lowered by $300 million as the company shuts down production of the current Intel 6 line and replaces it with the repaired chips. Repairing and replacing the flawed systems that have already shipped will cost another $700 million, Intel estimates.
Analysts aren’t too worried about the news — FBR Capital Markets estimates it will affect EPS by about $0.07 for the year, which is only about 4% of the company’s total earnings. Still, it’s an embarrassing misstep for the company, which is already under pressure from the rise of tablet computers, most of which use processors designed by Intel rival ARM.