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Although the motherboards will require replacements, the defective processors themselves cannot be sold either, leaving either Intel or Intel's partners to pay for them. "I have not seen any policy on processors yet, but they are basically worthless at this time and we intend to return them as well," Coffield said. "We cannot sit on processors that cannot be sold for months and be expected to pay for them."
Intel expects the recall to cause a shortfall of approximately $300 million in its first quarter, 2011 revenue as it brings production of the defective chipsets to an end and begins producing the newer version. In addition, the total cost to repair and replace the affected hardware is approximately $700 million, according to Intel, bringing the total cost of Intel's mistake to $1 billion.
"I don't know what kind of financial hit this will represent for Intel's partners," said a system builder who requested anonymity. "It depends on whether system builders are more into the desktop market or the server/workstation enterprise market. Desktop systems will be hit more severely than others."
In fact, system builders believe the percentage of the affected chipsets is relatively low, and many are passing on the message that most Sandy Bridge chips will not malfunction to customers who have purchased Sandy Bridge products. Intel said the number of Cougar Point chipsets affected is between 5 and 10 percent.
"I think Intel is well-run and they make good moves." Brown said. "They had a technical issue, they caught it, they're addressing it, and it’s all public knowledge -- I think that's important in and of itself. There's a five to ten percent failure rate for Sandy Bridge with this error. That is significant -- but it's also not significant from the standpoint of actually wanting to avoid having a problem, since 1 or 2 percent failure rate is usually the threshold for a recall and that isn't very much."
Coffield said Smart Guys Computers has told the same thing to customers about the impact of the error on their PCs, and will assure them of their support for those products as it waits for more details from Intel. "Customers who are inquiring about systems they have purchased are being advised that there is only a miniscule chance they will have any issues prior to the fixed boards becoming available," he said, "and that we as an Intel Premier Provider will stand behind the product and handle all warranty issues in a timely fashion."