Flawed Intel chip to be recalled

Duncan Martell

SAN FRANCISCO: Hewlett-Packard Co. said it had discovered a flaw in the design of some memory chips used in Compaq and HP notebook computers and would replace the components for about 900,000 of the laptops.

Intel Corp. also, the world's largest chipmaker, said it was recalling an unspecified number of chipsets, code-named Grantsdale, that Intel had launched earlier in the week.

Intel said it found a manufacturing flaw that could lead a computer using the chipset to malfunction. A chipset is an assembly of chips designed to work together.

The flaw was caused by a failure to etch away part of a thin film deposited on the chip during the manufacturing process, an Intel spokesman said, adding that Intel has corrected the manufacturing process.

The company did not say how many chipsets were being recalled.

The memory chips, when used in conjunction with other standard components found in the notebook PC industry, could cause the computers to freeze up, corrupt memory and lead to other problems, said Hewlett-Packard, the world's second largest computer maker.

The chips are made by Infineon Technologies AG, Micron Technology Inc., Samsung Electronics Co. Ltd., and Winbond Electronics Corp., Palo Alto, California-based HP said.

HP spokesman Mike Hockey said the two companies' recalls were not related.

The simultaneous announcement of the manufacturing errors was unlikely to have a major impact on PC sales, but could cause some supply chain delays and give pause to some buyers, said Shane Rau, a PC analyst for market research firm IDC.

"When you suddenly pull components or say that the components are being evaluated for errors, then it has an effect all the way down the line," Rau said. "There could be some incremental losses of revenue here."

IDC has said it expects sales of desktop, notebook and low-end server PCs to rise 13.5 percent this year to 175 million.

Palo Alto, California-based HP said problems can arise when the chips, or memory modules, are used in conjunction with chipsets made by Intel, a separate video graphics controller and Intel's Pentium 4 for mobile PCs or the Pentium M processor and a type of power management technology.

"Others face the same issue," Hockey said, referring to other PC makers.

Officials at Dell Inc. were not immediately available to comment.

Ray Gorman, a spokesman for International Business Machines Corp. said that in earlier tests it identified a memory chip design flaw with one supplier and disqualified that memory chipmaker. Gorman declined to name the chipmaker, but said it was one of the four that HP had named.

HP said it will be notifying customers and its partners about the replacement program. The company said that the probability of the problem occurring with the memory modules in question was "low and dependent on the user's environment."

Customers can go to HP's Web site and run a test to determine if their notebook PC contains the suspect combination of components, Hockey said. If they do, HP will mail out a replacement module and postage-paid envelope in which to return the old memory module.

HP bought Compaq Computer in May 2002 and retains the Compaq brand for some desktop and notebook PCs.

(Additional reporting by Daniel Sorid in San Francisco)






© Reuters 2004