Intel Confirms Flaw in Latest Chips

Intel Corp. acknowledged Friday that there is a flaw in its latest microprocessors, but said the problem can be repaired with software upgrades and that the company does not expect to have to replace any chips.

The flaw is an embarrassment for the Santa Clara-based company at a time when it is in the midst of rolling out a new processor, the Pentium II, that is expected to protect Intel’s dominant market share.

But if the company’s prognosis holds up, Intel will avoid repeating the costly steps it had to take in 1994, when a flaw in the original Pentium processor forced the company to replace millions of chips and take a $475-million write-off.

At that time, Intel sparked what was widely considered a public relations debacle when it initially refused to replace flawed Pentium processors. As criticism mounted, the company finally offered to replace the bad chips.

The latest flaw, which affects Intel’s Pentium Pro and Pentium II processors, occasionally leads to errors in complex calculations involving the conversion of exponential numbers to integers.

Home PC users are most likely to notice the problem, if at all, when playing computer games, Intel spokesman Howard High said. The chip flaw could lead to minor image distortions, he said.

But the glitch could also affect more critical applications, such as certain financial software, he said.

High said Intel is working with software companies to evaluate the effects of the flaw and whether upgrades are necessary. The software companies themselves will notify customers and make fixes available on the Internet.

When asked whether Intel would have to replace any of the flawed chips, High responded with caution: “We wouldn’t think so.”

Intel shares closed at $159.50, up 75 cents Friday on Nasdaq.