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Monday, January 31, 2011, 10:00 am PT (01:00 pm ET)

Intel admits design error in chipset likely bound for Apple's next iMacs

Intel said Monday that it has identified and corrected a design error in the chipset that supports its latest Sandy Bridge Core processors, potentially impacting the roll-out schedule of several mainstream desktop designs like Apple's next-generation iMacs.

"As part of ongoing quality assurance, Intel Corporation has discovered a design issue in a recently released support chip, the Intel 6 Series, code-named Cougar Point, and has implemented a silicon fix," the company said in a statement. "In some cases, the Serial-ATA (SATA) ports within the chipsets may degrade over time, potentially impacting the performance or functionality of SATA-linked devices such as hard disk drives and DVD-drives."

The world's largest chipmaker said it has since halted shipments of the affected support chip from its factories and has begun manufacturing a corrected version of the support chip which will resolve the issue. It added that the Sandy Bridge microprocessors themselves are unaffected by the flaw, nor are any other products from its portfolio.

More specifically, Intel said systems potentially impacted by the error are second generation Core i5 and Core i7 quad core based desktop systems. The first generation of those chips can be found inside Apple's current high-end, 27-inch iMac. Therefore, unless Apple chooses to radically alter its approach to the iMac going forward, recent history would suggest the second generation chipset in question will play some role in future models.

Systems from Apple's competitors with the affected supporting chips have only been shipping since January 9th, according to intel, and the company believes that relatively few consumers are impacted by this issue.

"For computer makers and other Intel customers that have bought potentially affected chipsets or systems, Intel will work with its OEM partners to accept the return of the affected chipsets, and plans to support modifications or replacements needed on motherboards or systems," the company said in its statement.

Intel added that it anticipates delivering the correct version of the chipset to customers in late February, but does not expect "full volume recovery" until April, meaning it's unlikely that any iMacs featuring the chipset will hit the market for at least another two months. Coincidently, AppleInsider this week began receiving unverified reports that Apple plans to draw down inventory of existing iMacs over the next 60 days.

For the first quarter of 2011, Intel said it expects the chip design error to reduce revenue by approximately $300 million as the company discontinues production of the current version of the chipset and begins manufacturing the new version. While full-year revenue is not expected to be materially affected by the issue, Intel also said it will cost the company approximately another $700 million to repair and replace affected materials and systems in the market.

"Since this issue affected some of the chipset units shipped and produced in the fourth quarter of 2010, the company will take a charge against cost of goods sold, which is expected to reduce the fourth quarter gross margin percentage by approximately 4 percentage points from the previously reported 67.5 percent," Intel said. "The company will also take a charge in the first quarter of 2011 which will lower the previously communicated gross margin percentage by 2 percentage points and the full-year gross margin percentage by one percentage point."