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Quanta Files Lawsuit Against AMD for Allegedly Selling Defective Chips

Quanta has filed a lawsuit against chipmaker AMD claiming the chipmaker sold defective chips to the largest contract manufacturer of laptops globally. The Taiwan based Quanta alleged that AMD committed breach of contract by selling products that are defective.

The suit has been filed in San Jose, California. It states that the chips sold do not meet the industry-standards and heat the tolerance processes, reports Bloomberg.

AMD happens to be the second biggest chipmaker in the world right after Intel and earns $6 billion in annual revenue. Quanta manufactures laptops for Dell, Acer, HP and many other companies. The devices made by Quanta are rebranded to make it look like as if the rebranded company made them.

The allegedly defective chips were used in notebooks manufactured for NEC which caused the computers to fail. According to reports, the suit is basically about ATI RS600ME an integrated graphics chip - AMD acquired ATI in 2006.

The suits states, "Quanta has suffered significant injury to prospective revenue and profits."

AMD disputes the allegations and has stated that these allegations are "without merit." Quanta is seeking damages as well as a jury trial.