HP to Refund, Replace PCs with Faulty Intel Chipset

HP officials said they will offer customers refunds or replacements for PCs that contain a flawed Intel chipset that is tied to the chip giant's "Sandy Bridge" platform.

Hewlett-Packard officials are halting production of PCs containing a flawed chipset from Intel and offering replacements or refunds to consumers who already have bought such systems.

HP's decision follows Intel's announcement Jan. 31 that a design flaw in a supporting chipset tied to its "Sandy Bridge" Core-i processors can cause the PCs not to function properly. Intel has stopped producing the flawed chipset and will start shipping fixed replacements in late February, with plans to be back in full production by April, if not earlier.

HP's actions mirror those of other PC makers who are trying to handle the fallout from the Intel announcement. Intel officials said they found the flaw in its 6-Series chipset-dubbed "Cougar Point"-last week, created a fix and decided Jan. 30 to halt production. They began talking with PC makers the same day they announced the decision to the industry.

Acer, Dell, Samsung Electronics and others have said they are taking a range of actions, including offering refunds or replacements to buyers of PCs with the problem chipset. All said they are working closely with Intel on these plans. Overall, the issue could cost Intel as much as $1 billion in lost revenue and related expenses. Officials with the chip maker said about 8 million of the flawed chipsets have been shipped.

HP officials said they, too, are working with Intel on the issue. In an e-mail to eWEEK, an HP spokesperson said the chipset problem impacts a relatively small number of PCs sold or ordered since Jan. 9. The affected PCs are mostly consumer notebooks and desktops, though a commercial desktop targeted at SMBs in the EMEA (Europe, Middle East and Africa) region also is impact.

HP, the world's top PC maker, has stopped producing systems with the flawed Cougar Point chipset, and is offering replacements or refunds to customers. Officials also said they have put a hold on shipments of the PCs still in the HP and channel inventories.

"HP is working with Intel and our distribution partners to address this industry-wide issue," the HP spokesperson said. "HP and Intel are working together to minimize any inconvenience to customers."

The first of the 32-nanometer Sandy Bridge chips were rolled out at CES (Consumer Electronics Show) 2011 in early January and offer integrated CPU and graphics capabilities on a single piece of silicon. The offering is similar in concept to rival Advanced Micro Device's Fusion platform, which also also features integrated CPUs and GPUs on a single die. The first of AMD's Fusion APUs (accelerated processing units) also were introduced at CES.

According to Intel officials, the design flaw in the 6-Series chipset impacts four of six SATA (Serial ATA) ports, which over time could cause problems in the performance of such PC components as SATA hard disk drives or optical drives. The problem will not be apparent to users immediately, but manifest itself over time. In addition, the officials said, the issue is only tied to the chipset, not the Sandy Bridge chips themselves.

In a Feb. 1 e-mail to eWEEK, Charles King, an analyst with Pund-IT Research, said while the problem may cost Intel as much as $1 billion in the long run, it's the PC makers who will feel the greatest impact.

"While the cost of the fix isn't insignificant ... it's all relative to a highly profitable company like Intel," King said. "The OEMs are the ones who will bear the brunt of this, both in facilitating consumer exchanges and repairs and in pulling/fixing stock that has been manufactured but not shipped."

He said he expects Intel to pay back the PC makers for their time and expenses.