Report: Quanta sues AMD over faulty chips

Quanta Computer has filed a lawsuit in a California court against Advanced Micro Devices over faulty chips used in some computers, an accusation disputed by AMD.

Quanta has accused AMD and its ATI Technologies subsidiary of selling chips that could not tolerate some heat levels, making the chips unfit for use in some NEC laptops manufactured by Quanta, according to a news report by Bloomberg. The faulty chips caused the NEC laptops to malfunction, the suit claims.

A court clerk at the U.S. District Court for the Northern District of California confirmed that Quanta filed suit against AMD, and that the case has been assigned to Magistrate Judge Howard Lloyd in the San Jose courthouse.

AMD spokesman Michael Silverman said the company has not been served with the complaint yet, but added that the allegations were without merit.

"AMD is aware of no other customer reports of the alleged issues with the AMD chip that Quanta used, which AMD no longer sells," Silverman said in an e-mail.

"Quanta has itself acknowledged to AMD that it used the identical chip in large volumes in a different computer platform that it manufactured for NEC without such issues," Silverman said.

Quanta is a contract manufacturer that makes computers for PC and server vendors. Once a worldwide PC vendor, NEC sells mostly to Japanese customers today.