Intel announced a flaw in the chipset of the brand new Sandy Bridge processor, which was released early January. It expects to deliver the corrected and updated version in late February, according to CNET.   Intel itself declared in a statement released on its website that it “stands behind its products and is committed to product quality” and that it has stopped shipment of the flawed chipsets and will work with OEM’s to replace and refund them. Samsung already declared this morning that it would refund any computer sold with a flawed chipset.

So what is the flaw exactly? “In some cases, the Serial-ATA (SATA) ports within the chipsets may degrade over time, potentially impacting the performance or functionality of SATA-linked devices such as hard disk drives and DVD-drives. The chipset is utilized in PCs with Intel’s latest Second Generation Intel Core processors, code-named Sandy Bridge,” explains Intel on its website. It emphasizes that the Sandy Bridge microprocessor and all other products are unaffected by this issue.

Intel says that only a few of these flawed chipsets are in the customers’ hands; those who bought systems running on quad-core Core i5 or Core i7 processors. Informationweek reports that this will cost Intel more than $300 million in the first quarter, in revenues and repairing and replacing the processer will cost about $700 million. AMD is the company that will most probably profit from this blunder, it is keeping a close eye on the situation and will try to impose its’ Fusion processor; Sandy Bridge’s direct rival to OEMs. Its stocks have already gone up 5 percent since the flaw announcement.

Some disagree that AMD will profit,Daniel Berenbaum with Auriga  says “We view it as unlikely that AMD’s Fusion products will be able to capture significant market share from Sandy Bridge – the window is likely to be small and AMD’s performance is not enough of a differentiator to drive PC OEMs to shift designs.”

However unfortunate this incident, history has shown us that Intel has no problem picking up the pieces and getting back in the game as demonstrated by the 1994 error in Pentium processor that cost the company almost half billion dollars. This incident is unlikely to make a dent in its long-term success and significant market share.