Intel’s flawed chip to cost company $1 billion – what about the stock? (INTC, AMD)

Intel (NASDAQ: INTC) announced today that the recently released Intel® 6 series support chips, which have been highly anticipated for months now,  were issued with a design issue that has now been fixed.

In the world of business, there are mistakes–and then there are mistakes. In INTC’s case, this faulty chip issue was definitely a mistake and according to a January 31st article by, it’ll cost about $1 billion to fix:

Intel says its Q1 revenue will be lowered by $300 million as the company shuts down production of the current Intel 6 line and replaces it with the repaired chips. Repairing and replacing the flawed systems that have already shipped will cost another $700 million, Intel estimates. (“Intel’s Billion-Dollar Mistake,” January 31, 2011,

Since INTC does not anticipate that it will be able to recover full volume delivery of its chip until April, that could also impact the company’s financials this year. INTC’s closing price was $21.46 after the announcement—exactly where it closed on January 28th. Competitor Advanced Micro Devices (NYSE: AMD) was up, rising from $7.49 to $7.83.

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*Prices and chart courtesy of Yahoo Finance.