Intel Corp. (Nasdaq: INTC) lowered its gross profit margin forecast for the ongoing quarter by several percentage points and slashed sales outlook for the period by $300 million because of a design flaw identified in one of its chipset circuit.
The company said it has started working on a fix for the problem but noted that the solution could cost up to $700 million. Intel said the chipsets affected by the flaw began shipping in the second week of January, adding that personal computer OEMs had been notified and were working with customers to correct the error.
The Intel statement read, in part:
The chipset is utilized in PCs with Intel's latest Second Generation Intel Core processors, code-named Sandy Bridge. Intel has stopped shipment of the affected support chip from its factories. Intel has corrected the design issue, and has begun manufacturing a new version of the support chip which will resolve the issue. The Sandy Bridge microprocessor is unaffected and no other products are affected by this issue. The company expects to begin delivering the updated version of the chipset to customers in late February and expects full volume recovery in April.
Intel said the problem it had with the chip design would not affect total 2011 sales although gross profit margin for the year would be down slightly. The company said it would take a hit on gross margin for the fourth quarter of 2010 "by approximately 4 percentage points from the previously reported 67.5 percent."
Read Intel's complete statement on the subject here.