Nvidia has announced that “significant quantities” of previous generation GPUs and mobile communications processors were defective and that it would take a $250M charge against earnings to repair and replace affected chips.

Nvidia didn’t say specifically what chips were faulty or how many are faulty but according to The Inquirer every single G84 and G86 GPU is affected. Both chips share an ASIC and the core design suffers from a heat related issue.

This is a pretty big deal for Nvidia and I’m worried that this combined with the recent release of ATIs 4800 series of graphics cards will end up with them taking a back seat to ATI again.

“Multiple analysts also told us that NV specifically told them that this problem is confined only to HP. I wonder why Dell is having failures in huge numbers for their XPS lines and replacing them with ATI parts? Why is Asus having similar problems? Go check the message boards, any notebooks that came with G84s and G86s have boards filled with dead machine problems. Most of these, especially on the NV forums are being quashed and removed by admins, so act quickly and take screenshots of your posts.

Basically, NV seems to have told each analyst a highly personalised version of the story, and stonewalls everyone else who asks. Why? The magnitude of the problem is huge. If Dell and HP hold their feet to the fire, anyone want to bet that $200 million won’t cover it?”

The Inquirer