Intel Corp. (NASDAQ: INTC) has decided to offer an extended warranty for its 13th and 14th Gen CPUs, which have been plagued by stability concerns. This move aims to mitigate customer dissatisfaction as the tech giant grapples with technical setbacks.
What Happened: Intel is offering an additional two years of warranty on its 13th and 14th Gen CPUs, which have been experiencing crashes, The Verge reported on Tuesday.
Despite the absence of a permanent fix for the crashing issues with Intel's 13th and 14th Gen Core processors, the company is attempting to appease customers by extending the warranty period.
Intel has acknowledged the "instability" problems, attributing them to "elevated operating voltage" and is preparing a mid-August patch to address the root cause, though it won't repair any pre-existing damage.
Originally, Intel's boxed CPUs came with a three-year limited warranty, but with this extension, the warranty period will now total five years. This move comes after Intel initially declined to comment on potential warranty extensions for the affected chips.
In a statement to The Verge, Thomas Hannaford of Intel expressed the company's commitment to supporting customers through the exchange process and promised more details on the extended warranty support soon.
"We stand behind our products, and in the coming days we will be sharing more details on two-year extended warranty support for our boxed Intel Core 13th and 14th Gen desktop processors," he said.
Intel has advised customers who purchased systems from OEM/System Integrators to contact the support team of their system manufacturer and those who bought boxed CPUs to reach out to Intel Customer Support for assistance.
Why It Matters: Intel's decision to extend warranties arrives amid a challenging period for the company. Following a disappointing second-quarter financial report, where earnings and sales fell below analyst expectations, Intel announced a significant cost reduction plan, including a 15% headcount reduction. This was a stark indicator of the pressures Intel faces as it attempts to navigate a turnaround strategy.
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The company's recent job cuts are part of efforts to streamline operations and fund its recovery efforts amid declining earnings and market share.
Furthermore, Intel's competitive landscape has intensified, with rivals like Advanced Micro Devices (NASDAQ: AMD) making significant inroads in the data center space, as highlighted by a JPMorgan analyst's note on AMD's growth.
However, it's not all bleak for Intel, as the company recently secured a legal victory in the London leg of a global patent dispute with R2 Semiconductor.
Price Action: Intel Corp's stock closed at $29.05 on Thursday, down by 5.50%. In after-hours trading, the stock fell further 18.90%. Year to date, the stock has dropped 39.23%, according to data from Benzinga Pro.