chrplace forwards an article in which Gartner's Brian Lewis offers his perspective on what led to last year's Xbox 360 recall. Lewis says it happened because Microsoft wanted to avoid an ASIC vendor. "Microsoft designed the graphic chip on its own, cut a traditional ASIC vendor out of the process, and went straight to Taiwan Semiconductor Manufacturing Co. Ltd., he explained. But in the end, by going cheap — hoping to save tens of millions of dollars in ASIC design costs, Microsoft ended up paying more than $1 billion for its Xbox 360 recall. To fix the problem, Microsoft went back to an unnamed ASIC vendor based in the United States and redesigned the chip, Lewis added. (Based on a previous report, the ASIC vendor is most likely the former ATI Technologies, now part of AMD.)"