Faulty chip costs Toshiba another $30 m.

A faulty floppy disk chip has forced Japan’s Toshiba to agree to pay more
than $30 million to settle allegations it knowingly sold defective products to
state agencies, said California state Attorney General Bill Lockyer.

In the settlement, Toshiba was allowed to denied liability. A similar $30
million deal was reached earlier with federal authorities. The problem in the
Toshiba laptop computers was isolated to a chip that controls the data flow to
and from floppy discs. The problem caused a loss or alteration of data.

Toshiba has corrected the defect in its newly manufactured computers and is
offering a free software patch for notebook computer sold earlier.