Intel Hit by Finding of Flaw in Chipsets

Intel is expecting to take a financial hit following the discovery of a flaw in its latest Core PC chipsets.

The company said that a design flaw in the "Cougar Point" support chip could lead to long-term performance issues with SATA devices such as hard drives and optical drives.

The issue does not affect the Sandy Bridge processor itself and the company said that users will be able to continue to operate affected systems while a fix is being developed and deployed.

Few of the flawed chipsets are actually believed to be in the hands of end users. The company said that the issue is limited to Core i5 and Core i7 quad core systems that were shipped after 9 January this year. Intel said that it will use its OEM partners to get the fix out to users.

Intel estimates that it will be able to begin releasing fixed chipsets by late February with manufacturing levels returning to normal by April.

In the meantime, Intel estimates that the issue will cost some $300m to fix over the current financial quarter and total up to $700m by the end of the year. The company will also reduce its fourth quarter 2010 margins by four per centage points.

The company also provided updates on two of its pending acquisitions. Intel said that it has completed a $1.4bn acquisition of Infineon Technologies AG Wireless Solutions.

Intel also believes that it will finalise its $8bn acquisition of security vendor McAfee by the end of March and the close of its financial quarter. That deal was recently given the approval of antitrust bodies in the EU.

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