The Inquirer reports that NVIDIA is taking a $120 million hit again this quarter on charges related to a faulty die and weak packaging material which was used in its graphics chips.  NVIDIA had previously taken a write-down of almost $200 million to cover warranty and product replacement costs on bad GPUs it supplied to Apple and other PC manufacturers.

NVIDIA is the GPU maker on all but a handful of Macintosh systems.

The trouble kicked off last July when it was reported that some Nvidia graphics chips were overheating. Nvidia said it was all down to weak packaging materials then. Later the INQ discovered that there was a problem with the soldering on the chips, although Graphzilla [NVIDIA] denied it.

The chips had been used by Dell, HP and Apple. They had to change BIOS settings to run laptop fans continuously and replace PCs that failed due to the faulty chips. The costs of those programmes were shared between Nvidia and the manufacturers.

Nvidia said that the costs were higher than originally anticipated, and would not estimate whether the company would incur further charges related to the flaws.

Apple, for its part, has issued an unprecedented three year free replacement if the NVIDIA parts go bad in MacBook Pros.  Many, however, think Apple is pursuing alternatives including building their own GPUs in light of the quality issues with NVIDIA.