NVIDIA suffers poor QC, stock tanks
Thrax
🐌Austin, TX Icrontian
<p>As the second fiscal quarter draws to a close the quarterly filings with the United States SEC have begun to roll in from US technology firms. Of particular interest to us this year is NVIDIA, and their July 2nd filing as excerpted below:</p>
<blockquote>On July 2, 2008, NVIDIA Corporation stated that it would take a $150 million to $200 million charge against cost of revenue to cover anticipated customer warranty, repair, return, replacement and other consequential costs and expenses arising from a weak die/packaging material set in certain versions of our previous generation MCP and GPU products used in notebook systems. All newly manufactured products and all products currently shipping in volume have a different and more robust material set. </blockquote>
<p>Run-around-and-put-the-fires-out language aside, this is bad news for black and green. Their filing states that any profit made in the third fiscal quarter of 2008 will be hamstrung by a 150-200 million burden of reimbursement to vendors.</p>
<p>While details of makes and models remain elusive, the filings indicate that mobile MCPs and GPUs were manufactured with poor packaging or had improper thermal characteristics ascribed to them. The result is a "higher than normal" failure rate on products that shipped in "significant quantities." Global laptop vendors have turned to NVIDIA to foot the bill for a substantially increased volume of RMAs and repairs.</p>
<p>As the violin plays on, NVIDIA (NASDAQ: NVDA) continues to make a precipitous decline on the stock market. NVIDIA wound down Wednesday's trading with a steady $18.06, and opened with a crushing 30% dip to $13. Their stock is currently valued at $12.52 and falling.</p>
<blockquote>On July 2, 2008, NVIDIA Corporation stated that it would take a $150 million to $200 million charge against cost of revenue to cover anticipated customer warranty, repair, return, replacement and other consequential costs and expenses arising from a weak die/packaging material set in certain versions of our previous generation MCP and GPU products used in notebook systems. All newly manufactured products and all products currently shipping in volume have a different and more robust material set. </blockquote>
<p>Run-around-and-put-the-fires-out language aside, this is bad news for black and green. Their filing states that any profit made in the third fiscal quarter of 2008 will be hamstrung by a 150-200 million burden of reimbursement to vendors.</p>
<p>While details of makes and models remain elusive, the filings indicate that mobile MCPs and GPUs were manufactured with poor packaging or had improper thermal characteristics ascribed to them. The result is a "higher than normal" failure rate on products that shipped in "significant quantities." Global laptop vendors have turned to NVIDIA to foot the bill for a substantially increased volume of RMAs and repairs.</p>
<p>As the violin plays on, NVIDIA (NASDAQ: NVDA) continues to make a precipitous decline on the stock market. NVIDIA wound down Wednesday's trading with a steady $18.06, and opened with a crushing 30% dip to $13. Their stock is currently valued at $12.52 and falling.</p>
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Comments
You might want to wait a little longer than today to buy.
Tables are turning yet again.
Very interesting.