|By Maureen O'Gara||
|February 1, 2011 10:00 AM EST||
A "design issue" has derailed the Cougar Point chipset for Intel's ballyhooed Sandy Bridge processors, forcing the company to pull Cougar Point off the market, it said Monday morning.
The hiccup will set back the rollout of Sandy Bridge gear by a few weeks.
Intel thinks some OEMs will wait; others will substitute an older-generation processor.
Intel says it has a Cougar Point fix and has already started making a new version of the problem dingus, formally called the Intel 6 Series.
The thing's only been shipping in systems since January 9, and Intel believes the only boxes that might be impacted that are in end-user hands are Second Generation Core i5 and i7 quad-core systems.
It figures they can be used without hazard until the new chipsets start arriving in late February.
The problem seems to be that the chipset's SATA ports may degrade over time, impacting the performance or functionality of hard drives and DVD drives. Intel does not think data can be impacted.
The company said during a conference call that it only made the decision to put the Cougar Point chip on hold Sunday night.
The "circuit design issue," which it called "pretty subtle," turned up last week after OEMs returned some sample chips that had reacted badly under continuing stress tests involving time, temperature and voltage. The fix, which Intel described as "straightforward," means a change in the chipset's metal layer.
Cougar Point is the only chipset available for Sandy Bridge and Intel reckons that eight million of the parts have already been integrated into motherboards. It calculates that perhaps 5%-15% of them might fail over time depending on configurations and use, but it's not really sure, which is one of the reasons for the recall.
It said it had had no end-user complaints but apparently there aren't all that many systems out there to complain about.
The problem is not a functional issue and the dingus previously passed internal and OEM validation tests.
Intel expects to be in full production with the replacement part by April. Sandy Bridge processors will keep shipping through the setback.
Intel said it will work with OEM on returning the bad chipsets and support the modifications or replacements needed on the finished motherboards and systems.
It estimates that the problem will reduce its first-quarter revenue by about $300 million. It puts the total cost of repairing and replacing the widget and the systems now in the market at around $700 million.
The screw-up will drag down the company's otherwise handsome Q4 gross margin by four percentage points to 63.5% and slice a couple of points off its forecast Q1 gross margin to around 61%-62% and lop a point off its full-year gross margin to around 63%-64%.
With Intel's acquisition of Infineon's Wireless Solutions business closing Monday and its giant McAfee acquisition closing by the end of this quarter, the company is now expecting its Q1 revenue to be $11.7 billion, plus or minus $400 million, up from its previous estimate of $11.5 billion, plus or minus $400 million with spending on R&D and MG&A up from a calculation of approximately $3.4 billion to about $3.6 billion.
Intel also boosted its full-year revenue growth projection from 10% to the mid-to high teens.
The Infineon unit will now operate as the Intel Mobile Communications Group.
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