Intel To Resume Cougar Point Shipments In Unaffected Systems

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Intel said Monday that it decided to lift the hold on shipments after extensive talks with its OEM partners on the subject. Intel has also started manufacturing corrected Cougar Point units and says it's on schedule to begin offering the fixed chipset to customers in late February.

Intel last week acknowledged that an error in its Cougar Point chipset will cause SATA ports in some chipsets to degrade over time, affecting the performance of attached SATA hard disks and DVD drives in PCs using Intel’s latest second generation "Sandy Bridge" Core processors. Intel said that Cougar Point is more or less the only chipset that runs alongside Sandy Bridge as it gets integrated into PCs.

Intel last week estimated that the Sandy Bridge recall will cost approximately $300 million of lost revenue in the first quarter, and that it will cost $700 million to fix and replace the defective chipsets. The resumption of Cougar Point shipments does notaffect forecasts for the year, Intel said.

Several OEMs recalled Sandy Bridge-based systems as a result, after unveiling those systems last month at CES 2011. Lenovo, HP, Dell, MSI and Samsung are among those that have suspended production of systems running Intel 's Sandy Bridge platform and offered to compensate customers affected by the Cougar Point design flaw.

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End users who purchased any of the half-million systems that have been affected by the flaw will receive refunds and replacement parts from Intel's OEM customers. How that affects the relationship between Intel and those manufacturers -- whose high-voltage and temperature tests identified the error -- remains uncertain.

Further down the supply line, Intel's partners reacted to the Sandy Bridge recallby alternately criticizing Intel and giving the chipmaker credit for quickly identifying and fixing the problem, and offering a timeline for issuing replacements. Despite its quick response, however, Intel may not be able to avoid a lag in the supply line considering the sudden halt in the manufacturing process.

The fallout from the recall is all the more significant since Intel's partners reacted to the Sandy Bridge recall with a great deal of enthusiasm. Resellers said Intel's second-generation Core processor line represents a major upgrade in performance for an integrated graphics solution, according to several system builders, and a major opportunity for Intel's reseller channel