ATI’s resurrection as a serious contender for the top spot in the GPU industry has much to do with vastly improved technology, cheap mid-level offerings and its ability to meet demand. On the other hand, Nvidia is faced with delays and defects that are beginning to have a bearing on its financial condition. The graphics chip manufacturer has announced that it expects the repair and replacement of certain defected products to cost it $150-200 million.

It has also been forced to lower its financial outlook for Q2, 2009 due to delays and unexpected price cuts. It now expects earnings for Q2 to be between $875 million and $950 million, which would be a steep decline from Q1 earnings of $1.15 billion. If we construe talk of “unexpected price cuts” to be Nvidia’s admission that it didn’t really see the AMD/ATI onslaught coming, we know exactly what is wrong with the company. Complacency!

Image Credit: SetSetC

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