Photo: Rory Read, President and CEO, AMD: Legal trouble ahead?
The world's largest contract manufacturer of tablets and laptops, Quanta Computer from Taiwan, filed a case against AMD at California in January this year. Quanta accused that AMD supplied it a series of defective mobile computer chips thus breaching its contract terms. Quanta alleged that the chip maker was negligent as it failed to meet industry standard processes for heat tolerance while manufacturing the chip.
Quanta manufactures laptops for brands such as Acer, Dell, HP, and NEC, among others. Quanta claimed that the defective chip supplied by AMD which it used in the mobile computers built for the Japanese PC brand, NEC, caused those machines to fail. Reportedly, the chip series in question is ATI RS600ME, a GPU chip from ATI, the company that AMD bought out in July 2006.
AMD was prompt to refute the allegation made by Quanta, describing them to be without any merit, arguing that it has not received any complaints from other customers regarding the same product.
Since the legal dispute is related to an old chip that AMD does not manufacture or sell any more, it is less likely to have any adverse impact on its business. The impact will however be on consumer perception about AMD chips.