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Comments: 219 +-   Lawsuit Claims Nvidia Execs Concealed Serious Flaw on Wednesday September 10 2008, @10:58AM

Posted by CmdrTaco on Wednesday September 10 2008, @10:58AM
from the its-not-a-bug-if-you-say-its-on-purpose dept.
hardware
snydeq writes "A lawsuit filed in a California court on Tuesday alleges Nvidia concealed the existence of a serious defect in its graphics-chip line for at least eight months 'in a series of false and misleading statements made to the investing public.' The lawsuit contends that Nvidia CEO Jen-Hsun Huang and CFO Marvin Burkett knew as early as November 2007 about a flaw that exists in the packaging used with some of the company's graphics chips that caused them to fail at unusually high rates. Nvidia publicly acknowledged the flaw on July 2, when it announced plans to take a one-time charge of up to $200 million to cover warranty costs related to the problem. That announcement caused Nvidia's stock price to fall by 31 percent to $12.98 and reduced the company's market capitalization by $3 billion, the lawsuit said. The lawsuit seeks class-action status against Nvidia and unspecified damages."
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  • by RingDev (879105) on Wednesday September 10 2008, @11:03AM (#24947925) Homepage Journal

    I had an nVidia 8800GT card fail prematurely early this summer. I was pleased with its performance, other than the failure, so I picked up the newer version of the same card, from a different manufacturer. Unfortunately that was the middle of June :(

    So odds are high that this card is going to die early too. And of course I don't have receipts for either card at this point, but if there's a chance at recouping some of my investment, I'd sign up.

    -Rick

    • by Anonymous Coward on Wednesday September 10 2008, @11:07AM (#24948013)

      You should definitely sign up. They will most likely be providing a $20 coupon to all people who purchased nVidia products between a specified date range. I've heard the lawyers might get a small piece of the settlement too - like 50%.

      • by mapsjanhere (1130359) on Wednesday September 10 2008, @11:25AM (#24948311)
        Sorry, this is the law suit for duped stock buyers, not duped product buyers. The duped product lawsuit is in room 12.
        Past the joke, if it makes it past the warranty period you have little regress as a customer. While it's illegal to say "we're doing great" while knowing your main product line is failing from a security law point of view, unless the failing parts are in a safety critical application (e. g. child car seats) there is no law mandating a recall/replacement/settlement for selling a crappy product.
      • Re: (Score:2, Interesting)

        Okay, so I get a $20 coupon. The 8600GT in my MacBook Pro failed this week in a way which is strongly consistent with the other reports.

        The laptop is 3 months out of warranty so it's going to cost me around $1200 to get it fixed, when this appears to be a result of a manufacturing defect.

        You desktop jockeys might just be able to slot in a new card and write it down to experience, but laptops are affected too. It appears my options are limited to:

        • Hoping Apple's "legendary" customer service comes through and
        • by MightyYar (622222) on Wednesday September 10 2008, @11:47AM (#24948621)

          The laptop is 3 months out of warranty so it's going to cost me around $1200 to get it fixed,

          Apple has a flat-fee repair of like $300, fyi. Take it to a Genius Bar.

          • by sam_paris (919837) on Wednesday September 10 2008, @01:33PM (#24950305)
            That's not true in fact. I recently had my Macbook Pro repaired out of warranty and it pretty much all needed replacing (motherboard, fans, everything except hd and ram) and it cost me $1200 excluding tax.

            I asked the "Genius" about the flat fee thing and he said it didnt exist. Which surprised me because a year and a half ago I had a different Macbook Pro die and the flat fee applied in this case..

            So apparently it either

            a) Doesnt exist anymore
            b) There are obscure rules for when and where it applies
            c) Some "Genius's" are douchebags
        • by Anachragnome (1008495) on Wednesday September 10 2008, @12:09PM (#24948965)

          $1200?

          There is your price of "portability".

          As a former mechanic, it always pissed me off when auto manufacturers tried to force customers to dealerships for repairs by making the components so difficult to repair that even independent mechanics could not fix them.

          The dirty sekret is that the dealerships couldn't either. They simply resorted to part-swapping to confirm their half-assed diagnosis(manufacturer flow charts(Step 14: Replace with known good part), NOT actual testing).

          The end result was that the independents were made to look like bumbling idiots("Your gunna have to take it to the Dealer...") after actually trying to find the problem, while the Dealership makes the money just by throwing parts at the problem (at customer expense).

          I HIGHLY suspect that your a victim of that same process. One good reason to AUTOMATICALLY suspect your bill when there is more then one component replaced. If there was, more then likely, the first part didn't fix it, but the second did, and they want to get paid for the time it took to install the first part, so they simply tell you one part "took out" the other.

          This is one of the reasons I am a FORMER mechanic. From a moral standpoint, I simply could not be a party to the deception that is all too prevalent in the business, and quit.

          • Re: (Score:3, Interesting)

            That isn't always the case with mechanics thankfully. We have a local repair shop here in town that our vehicles go to unless there is something absolutely preventing it. They have had the vehicle up on a lift and have said "hey, we see these other issues, if you want to have us replace them while we have it your labor costs will be the same since we already have it up, tools out, and its a minimal fuss part." (I can attest to the fact that the parts WERE indeed failing as I have a fair idea what I am do
            • Re: (Score:3, Interesting)

              Amen, brother.

              The problem that I had was that my ethics got in the way. Or, to be more precise, my job got in the way of my ethics. Fortunately, it was far easier to part with my job then my ethics. It meant taking a stand, one that may NOT have been in my best interests, financially speaking, but it was much easier to do when I looked at it another way. I simply asked myself "What example do you want to set for your children?".

              Funny thing about having kids. You have to start putting you money where your mo

    • by vonPoonBurGer (680105) on Wednesday September 10 2008, @11:14AM (#24948117)

      So odds are high that this card is going to die early too.

      Did you buy a card with a lifetime warranty? Both EVGA [evga.com] and XFX [xfxforce.com] offer lifetime warranties on 8800GTs. Personally, I won't buy RAM or video cards from a company that doesn't offer a lifetime warranty, as there are more than enough manufacturers for both products offering these warranties. My current 8800GT is an EVGA, and it's nice knowing they're on the hook for this flaw if it happens to strike me. The card manufacturer has probably spent millions on Nvidia silicon, so they have clout to extract some compensation from Nvidia, whereas I do not.

      • Interesting, I think the 8600GT that died was an EVGA, I'll have to see if I still have it laying around.

        -Rick

      • Re: (Score:3, Informative)

        I had a Cisco 400 with a lifetime warranty. It died a while back. It was out of warranty. Apparently Lifetime for Cisco means 5 years.

        I hope my 8600M GT doesn't have to deal with it. It's in my MacBook Pro, so no easy card swap.

      • by ivan256 (17499) on Wednesday September 10 2008, @12:44PM (#24949515)

        I had one from PNY. I called to have them make good on the lifetime warranty, and was told that "lifetime" meant the lifetime of that product line, and since they no longer make that card, it's no longer covered. I went back and read the fine print, and sure enough, that's exactly what the warranty said.

        I hope they enjoy whatever profits they made off of me on the sale of that one card, because I am now an ex-PNY-customer. I now typically buy EVGA.

        • Re: (Score:3, Interesting)

          I bought a pen/flash drive from them. All of a sudden, it started acting up and wouldn't stay active (the pen part). Then, a few days later, their pocket clip fell apart causing the pen to fall out of my pocket and become severely scarred and the little plastic lens on the top got lost as did the clip part. Since the whole point of having flash in a pen was so that I could carry it around (and thus it was basically useless without the clip), I tried to get them to honor their warranty. They finally agre

    • And of course I don't have receipts for either card at this point, but if there's a chance at recouping some of my investment, I'd sign up.

      Except you didn't invest in NVIDIA, you purchased a graphics card made by NVIDIA. This lawsuit is by shareholders.

    • Buy from a good partner. One of the good things about nVidia is they seem to have some quality partners. eVGA and BFG seem to be the best I've seen. They both seem to offer lifetime warranty. They also offer a step up program for like 3 months. This means if you buy a card, and then a new model comes out, or you buy a lower end card and decide you need more power, you send back your old card, pay them the difference, and they'll give you the new one.

      At any rate, buy from a good partner and failures shouldn'

      • Re: (Score:3, Interesting)

        Yea, New Egg is nice for that. My outlook archive is a nice backup too, plus I typically keep the packing slip and I generally register the item (not allways).

        I've been burned a few times by not having documentation to prove a part was under waranty when it failed. Not going to hapopen again!

        I'm currently loving BestBuy for their extended waranties as well... In the last 6 years I've exchanged 4 printers, a laptop, a $600 stereo reveiver, a 32" LCD TV, 2 UPS units, and an iPod. All of these items have b

  • which specific chips are effected?

    according to this it seems to be laptop graphics http://mobile.slashdot.org/article.pl?sid=08/08/01/0142219&tid=128 [slashdot.org]

    what about AGP & PCIe Desktop graphics cards?
    • Anything running 8000-series, or even the 9600GT. It seems the cards that are "safe" are the supposed GeForce10 models, whatever they're calling them.

    • by vonPoonBurGer (680105) on Wednesday September 10 2008, @11:27AM (#24948359)

      which specific chips are effected?

      No one knows for sure, and Nvidia isn't telling. The Inquirer says practically [theinquirer.net] all [theinquirer.net] of them, but their author has a history with Nvidia so there's quite a potential for bias there. The running theory is that the problem is due to thermal properties of a substrate material. This substrate material supposedly expands and contracts at a different rate than surrounding material in the chip package. Over time, this stresses the silicon or solder points, eventually causing a failure of the part. Laptop parts are definitely affected, you only need to look in notebook manufacturers forums and you'll see an incredible number of posts from owner of notebooks with, for example, 8600 GT mobile parts.

      Desktop parts may also be affected, since they're all based on the same core silicon with (supposedly) the same substrate materials. It's possible that the problems aren't as apparent (at least not yet) due to the different thermal conditions you'd see in a tower chassis compared to a notebook. The very popular 8800GTs out there may start failing en masse in three months, six months, a year's time, or maybe never. Because Nvidia won't specifically say which parts are affected, whether it's all the parts or only certain manufacturing runs, etc., we have only speculation and rumor to go on.

      • No, it's the newer G92 and derivatives, used in the 8800GT and company. The 8800 series also contains the G80 (8800GTX) and its derivatives, which are not affected.
  • This kind of lawsuit is what's supposed to make "capitalism" work ... corrupt businesses being actually held accountable for shady dealings.

    I hope it bankrupts them.
    • Re: (Score:2, Informative)

      What doesn't make capitolism work is a bunch of people without jobs. The US economy is already falling apart, what you should be hoping for is for nvidia to clean up it's act, make better chips, sell lots of them and hire lots of employees.
      • Re: (Score:3, Insightful)

        So we can buy more shit?

        That's the problem there buddy. We shouldn't be supporting lying companies selling sub par products.

        Often time the retailers pay for this more than anyone else. Bad business is bad for everyone and its not up to consumers to support BAD BUSINESS nor should we feel like we have.

      • Well, not really (Score:5, Informative)

        by Moraelin (679338) on Wednesday September 10 2008, @11:56AM (#24948771) Journal

        1. A dirty little secret of all governments, the USA included, is that they _can't_ get rid of unemployment or inflation, and they're actually trying to keep both where they want them. There's this funny little hyperbolic-looking curve called the Phillips Curve [wikipedia.org], which ties inflation to unemployment. If you even tried to push one to zero, the other rises sky-high.

        So the best any government can do is to keep both at a point they can live with. Exactly what that point is, that's a matter of political debate and position, but everyone tries to do that. A mean most used is the interest rate. That's what the federal reserve does in the USA, but other countries have their own similar institutions.

        (The corolary being that any politician which harps on unemployment and inflation as proof that his opponents are evil, or worse yet, promises to really solve either or both, is himself a liar and has no scruples telling you lies to gain power.)

        So, yes, a bunch of people without jobs _are_ what makes the economy work. (A capitalist economy included.) Because without those, you'd get a hyperinflation comparable to interwar Germany. (Just as a comparison point, not saying that that's the same cause.) And conversely, if anyone actually managed to eliminate inflation, like some idiots demand, most of you would be out of job.

        2. Well, actually, the reluctance to make people change jobs was arguably one of the (several) reasons the Soviet economy colapsed. They were very reluctant to kick people out of a job, since the whole theory was that everyone should be given a job in communism. So if they made a hammer manufacturing company, and 20 years later there would be more of a need for wrenches, they'd still keep a bunch of people there making hammers, just so they don't kick them out and tell them to find another job. It's not the only factor, of course, but worth thinking about.

        Or seen at another level, they wanted to eliminate both the unemployment _and_ inflation (via price controls) which had the same devastating results as when it had been attempted before. If both can't take their natural positions on that curve, something else has to give. In their case, productivity went down instead, and corruption went out of hand. Which effectively is another way to get inflation, only in a much more destructive way.

        3. The whole thing about capitalism and the free market is that it's an optimization algorithm. It's really a genetic algorithm, based on semi-uninformed trial and error. The "genes" (processes, ideas, products) which are closer to optimal survive and are copied by others, and the process repeats, moving it all closer to the optimum. The genes which lost, and the companies which bet on them, die. Sometimes spectacularly, leaving a bunch of people temporarily unemployed.

        That's how it's supposed to work. Bit wasteful, no doubt, and stressful for those who end up looking for a new job. Scott Adams of Dilbert fame (who, I might add, is actually trained as an economist, so he might understand these things) claimed in a blog post that it's "harnessing the power of stupidity" and that at any given moment, 80% of society's resources are pushed off a cliff by idiots. But somehow it seems to work better than anything else we've tried. Trying to prevent that optimization cycle from happening, deviates from optimum very quickly, and produces even worse results.

        It _is_ what makes capitalism work.

              • Re: (Score:3, Interesting)

                Actually, it would come from loans. The way to manipulate inflation and unemployment is to change the loan rate. The way that works is that, well, a company judges investing in new stuff against that rate. If you pay 10% interest, then an idea which promises 11% return is worth taking a loan for, one which promises only 9% return is no reason to take a loan to implement. So by varying that you can essentially make sure that only things promising very high returns get done, at one end of it, or anyone with a

      • Without nVidia, what's going to put the coals to AMD/ATi's proverbial behind?

        Customer demand for better service. If AMD/ATI doesn't provide it, then you have a huge demand that's unfulfilled. That provides a large incentive for a new or existing company to fill that demand. If they need money to make it happen, banks will see the demand and be willing to offer loans. If there is no demand, then what's the issue? If you think there should be a demand for better, then you should convince customers of that.

  • nVidia is facing a lot of competition now. AMD/ATI has come out with a lot of really good cards The 38xx, 48xx, and the new low end 46xx have all been really good cards and forced nVidia to drop their prices.
    Crossfire now seems to work better than SLI and Intel is supporting Crossfire in some of it's chip sets.
    Now they have what seems to be the nVidia version of the red ring of death.
    I hope that they get things going again. I am a pretty happy nVidia customer. I have a motherboard with an nVidia chipset tha

      • Re: (Score:3, Insightful)

        Actually their latest drivers are pretty dang good. Plus nVidia had a bunch of driver issues as well not long ago.

  • by Manip (656104) on Wednesday September 10 2008, @11:20AM (#24948219)

    These stories keep on referencing the packaging being at fault...

    Now I'm no electrical engineer but when you take a working chip and put it in a machine it seems a little odd to blame the packaging it came out of for higher than normal failure rates if it works initially.

    Maybe "packaging" refers to the way the actual chips are placed into the material around them? Although it seems like a very odd way of wording it as to me packaging implies something that is discarded.

    If someone could explain in non-layman's terms what exactly the problem was I would much appreciate it.

    • Re: (Score:3, Informative)

      the inquirer http://www.theinquirer.net/gb/inquirer/news/2008/09/01/why-nvidia-chips-defective [theinquirer.net] had a good summary series on what's bad.
      In short, it's the connection of the chip to the board. You have minute metal connections providing current and data transport from the physical chip to the rest of the computer. The choice of material for these connection was poor, and so was the choice of glue holding the chip and the substrate together (and ideally protecting the metal connects from undue stress).
      The
    • by Lumpy (12016) on Wednesday September 10 2008, @11:33AM (#24948441) Homepage

      Nope, it seems that the cardboard box they were shipped in contain a high level of a rare Iridium isotope that causes molecular decay of the technology in the Nvidia chip. Nvidia runs on Logic diamonds and logic diamonds exposed to Iridium 237 causes rapid decay and failure.

      If they would have had the packaging done in the USA instead of china things would have been ok.

      NOTE: there is no danger to the consumer, the paint on the outside of the boxes has high amounts of lead in it, shielding you from the Iridium 237 radiation.

      Cyrnfr hfr tbbtyr arkg gvzr gb trg na nafjre guvf fvzcyr dhrfgvba

      Thanks!

    • the packaging is what the silicon wafer is embedded in to make it a chip. It's the packaging that interfaces the gpu with the board.
      see http://en.wikipedia.org/wiki/Integrated_circuit_packaging [wikipedia.org]

    • by Sj0 (472011) on Wednesday September 10 2008, @11:34AM (#24948453) Homepage Journal

      An actual microchip is absolutely miniscule. The ceramic(or plastic, or meta) that holds it and contains the pins that get soldered to the board is called packaging.

    • Re: (Score:3, Insightful)

      Chip packaging refers to the part around the silicon. In your stereotypical chip, it's the gray 'body' that the pins emerge from.
    • Each chip is actually just a really thin slice of silicon with extra impurities added in important places. This small slice of silicon is quite fragile and doesn't really have an interface that you can easily connect to. So they put this slice in a "package" which is usually plastic or ceramic but occasionally metal. Then they use very thin gold wires to connect points on the silicon slice to pins that come out of the package. Then the package is sealed. The package exists to protect the fragile silicon sli
    • The slice of silicon wafer that makes up the guts are the 'chip'. The black piece you can see with the wires sticking out of it, and with the wires inside that connect to the actual chip is the packaging.
    • For a while now, chip packaging has referred to the material around the chip. Also the packaging can be used as a name for the board interface to the chip as the pin assembly is considered part of the package. One current Intel desktop chip packaging for Core 2 Duo is LGA775 [wikipedia.org] or Socket T. Package is sometimes overlooked as a factor of chips but it is important. For the MacBook Air, Apple worked with Intel to shrink the package 60% to fit into the very small motherboard.
    • by kesuki (321456) on Wednesday September 10 2008, @12:29PM (#24949269) Journal

      "If someone could explain in non-layman's terms what exactly the problem was I would much appreciate it."

      nobody else caught your request for 'non-layman's terms' so here goes:

      Chip Scale Packaging (CSP) Technology
      The information presented in this chapter has been collected from a number of sources describing CSP
      activities, both nationally at IVF and reported elsewhere in the literature. The most important of the former
      being the Chip Scale Packaging Task Force, an international multi-client programme carried out between
      1996 and 1997 and a project work carried out by two students at Chalmers University of Technology..
      D1. Introduction to CSP Technology
      D1.1
      Definition of CSP
      Originally, CSP was the acronym for Chip Size Packaging but very few packages are of true chip size.
      Therefore, the acronym is today usually used for Chip Scale Packaging. According to IPC's standard J-STD-
      012, "Implementation of Flip Chip and Chip Scale Technology", a CSP shall have an area of
      no more than 1.2X the area of the original die size and is direct surface mountable [D1].
      D1.2
      Description of various types of CSPs
      In contrast to most other package types, the name of the package type, "Chip Scale Packaging", contains no
      information about how the package is constructed, except for that it shall have approximately the same size
      as the chip. Therefore, CSPs include component types with probably more dissimilar characteristics than
      any two other IC package types clearly manifesting the inaccuracy to look at CSPs as a homogenous group.
      Some packages look like miniaturised BGAs which names like miniBGA and BGA indicate. Others have
      leads which give them properties similar to conventional leaded packages such as PLCCs. For this reason,
      CSPs are often classified based on their structure. At least four major categories have been proposed [D2].
      These are: flex circuit interposer, rigid substrate interposer, custom lead frame, and wafer-level assembly.
      Examples of packages of these categories are given in Figure D1.
      Chip
      Sealing Resin
      Lead Frame
      Wire Bond
      Tape
      Protective
      Layer
      Custom Lead Frame
      Package by Fujitsu
      Rigid Substrate Interposer
      Package by Matsushita
      Chip
      Sealing Resin
      Land pad
      Ceramic Substrate
      Via
      Stud Bump
      Flex Circuit Interposer
      Package by Tessera
      Chip
      Ring
      Lead
      Flex Tape
      Bump Array
      Elastomer
      Wafer-Level Assembly
      Package by ChipScale
      Metal Cap
      Epoxy
      Metal Lead
      Metal Plated Silicon Post
      Silicon Circuit
      Figure D1. Main CSP Categories
      D1.3
      Driving Forces for using CSPs
      The main driving forces for using CSPs are:
      Improvement in performance
      Size and weight reduction
      Easier assembly process (compared to bare die attach)
      Lower overall production costs.
      Of these, reduction of size and weight are probably the most important factors for initial adoption of CSP
      technology. Consequently, consumer products like camcorders, mobile phones, and laptops are among the
      products that have been first to utilise CSPs.
      D1.4
      Advantages and disadvantages using CSPs
      Chip Scale Packaging combines the best of flip chip assembly and surface mount technology. It gives
      almost the size and performance benefits as bare die chip assembly, at the same time as it offer the
      advantages of a encapsulated package. CSPs can be standardised, tested, surface mounted, and reworked.
      So far most CSPs have been produced for applications with rather low number of I/Os but many types of
      CSPs can be produced with large number of interconnections. However, before CSPs with large number of
      I/Os will find widespread use, techniques for producing reliable low-cost high-density printed boards must be
      developed.
      The advantages and disadvantages of CSPs depend on what one compare with, standard surface mount or
      bare die assembly. Due to the large spread of characteristics for various CSPs, it also depend on the type of

  • If nVidia is spending $200 million to cover these faulty items under the warranty, then why file a law suit? If your card is out of warranty, then nVidia has no legal obligation to fix it. That's what a warranty means. It might be frusrating, but if they warrant the item for 1 year and it fails in 3 years then I don't see why they are liable.

    Of course, I have one of these bad chips in my MacBook Pro, so hopefully it will fail within the 2 and a half years I have left and they will fix it. If not, I'll b

    • Re:Again? (Score:5, Insightful)

      by PunkOfLinux (870955) <mewshi@mewshi.com> on Wednesday September 10 2008, @11:05AM (#24947981) Homepage

      IANAL, but different parties can sue, I think.
      Manufacturers of machines can sue for damages to reputation, warranty costs, etc.
      Investors can sue for lost of investment, since it wasn't, in any way, a market force that caused the loss of value.
      Those who got the chips in machines can sue for damages too, I bet.

      Frankly, this whole fiasco just strengthened my love for ATI. Their newer binary blobs are amazing.

      • Re:Again? (Score:4, Funny)

        by Anonymous Coward on Wednesday September 10 2008, @11:11AM (#24948075)

        "Frankly, this whole fiasco just strengthened my love for ATI. Their newer binary blobs are amazing."

        Quick! Someone frame the above. I never thought I'd see the day when someone said something nice about ATI drivers.

      • "Their newer binary blobs are amazing."

        So long as you don't want to run two X servers on two VTs.

      • No, they're not 'punished' by that. They're being punished for investing in a company that lied about shit products.

        • Re: (Score:3, Insightful)

          [stockholders are] being punished for investing in a company that lied about shit products.

          Have you seen the markets the last couple weeks? There must some big crapload of companies out there who lie about shit products.


          ... oh wait.

      • It doesn't work that way. The shareholders are punished for buying a stock in a company that doesn't open source its drivers.

        Oo! Oo! Let me add one: it's because Bush is still in office.

        There! We got a post promoting F/OSS and bashing Bush!

    • Re: (Score:3, Informative)

      This seems to be another marginal use of the class action by attorneys looking for an easy payday while the rest of us all get cheques for $0.33 and graphics card prices go up by a couple of dollars to compensate (aka the lawyer tax).

      The class is stockholders not consumers. Unless you hold/held stock in Nvidia in the timerange, you won't see anything.

    • You can trust individuals, yes, but regardless of the pernicious doctrine of corporate personhood, that's as far as you should go. Corporations are basically required by law to behave in an untrustworthy way, and even if the individual at the helm of the corporation is trustworthy there are limits to how far they can carry their intentions (however good) through.

Anybody with money to burn will easily find someone to tend the fire.