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Quanta Sues AMD Over ‘Defective’ Chips

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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AMD denies its chips caused Quanta-built NEC laptops to malfunction

Notebook manufacturer Quanta is suing AMD over allegations that the chipmaker sold defective products.

The lawsuit, filed in a US federal court in San Jose, California, claims breach of warranty, negligent misrepresentation, civil fraud and interference with a contract.

Claims ‘without merit’

Quanta, the world’s largest contract maker of notebooks, said that AMD and its ATI technologies unit sold them chips that didn’t meet heat tolerances and were unfit for purpose. The chips were used in notebooks manufactured for NEC and Quanta said that they caused the computers to malfunction.

The Taiwanese company is seeking a jury trial and damages and in the court papers it said, “Quanta has suffered significant injury to prospective revenue and profits.”

However AMD disputes Quanta’s complaints, saying they “are without merit”.

“AMD is aware of no other customer reports of the alleged issues with the AMD chip that Quanta used, which AMD no longer sells,” said AMD spokesman Michael Silverman. “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.”

AMD is the second largest maker of computer processors in the world with only Intel ahead of it. Last month it revealed new processor and graphics products for mainstream PC users and enthusiasts while it is also said to be backing an open-source project designed to bring Google’s Android mobile operating system to PCs powered by x86 processors.

Quanta also makes notebooks for HP, Dell and Acer and is the hardware supplier for Amazon’s recently launched Kindle Fire tablet, having agreed a deal worth around £2.1 billion.

However it is no stranger to litigation itself, as in October, it followed in the footsteps of fellow Android manufacturers HTC and Samsung by agreeing a licensing deal with Microsoft, rather than meet it in court.