Quanta Sues AMD Over Alleged Faulty Notebook Chips

Quanta said AMD chips it used in NEC notebooks did not meet industry-standard heat-tolerance specifications, causing the computers to fail. AMD is disputing the claim.

Quanta Computer reportedly is suing Advanced Micro Devices for allegedly selling defective processors that were used in notebooks Quanta had made for NEC.

In a lawsuit filed Jan. 4 in San Jose, Calif., Quanta officials are accusing AMD, the world's second-largest computer chip maker behind Intel, of selling processors that overheated in certain situations, according to a Bloomberg News report.

In its filing, Quanta said the chips caused the NEC notebooks to stop working properly, and claims that the faulty chips threaten to damage its reputation and business. "Quanta has suffered significant injury to prospective revenue and profits," the company wrote in its complaint.

The lawsuit levels multiple claims against AMD, including negligent misrepresentation, civil fraud, breach of warranty and interference with a contract. Quanta is looking for a jury trial and damages.

AMD spokesman Michael Silverman, in a statement to Bloomberg, disputed Quanta's claims, and said that the allegations against the chip maker "are without merit." Silverman also noted that there have been no other complaints-from Quanta or other systems makers-regarding the chip in question, which he said AMD no longer sells.

"AMD is aware of no other customer reports of the alleged issues with the AMD chip that Quanta used, which AMD no longer sells," he wrote. "In fact, Quanta has itself acknowledged to AMD that it used the identical chip in large volumes in a different computer platform that it manufactured for NEC without such issues."

The chip in question reportedly is the ATI RS600ME integrated graphics chip. AMD acquired its graphics business when it bought ATI in 2006 for about $5.4 billion.

Taiwan-based Quanta, with more than 30,000 employees, is the world's largest original design manufacturer (ODM) of notebooks, and makes systems on contract from such major OEMs as Hewlett-Packard, Dell, Acer, Fujitsu, Toshiba and Lenovo. It also makes other devices for vendors ranging from Cisco Systems to Research In Motion.

Quanta essentially makes the systems, which are then rebranded by the vendors.