Original URL: http://www.theregister.co.uk/2014/02/17/cisco_memory_components_snag_hits_net_income_hard/

Cisco HAUNTED by $655m memory components snag

Networking giant pays BIG to battle faulty kit

By Kelly Fiveash

Posted in Data Networking, 17th February 2014 12:05 GMT

Cisco has swallowed huge costs to attempt to firefight heavily degraded memory components found in the company's kit - but it's refusing to bad-mouth the supplier behind the tetchy chips.

It said that customers and biz partners, whose products are largely out of warranty, would be supported by Cisco after it decided to switch its strategy on dealing with the faulty gear.

The networking giant has taken a $655m charge to cover the costs of managing the problems, it said.

Although the majority of Cisco products using these components are experiencing field failure rates below expected levels, the components are known to slowly degrade over time. A handful of our customers have recently experienced a higher number of failures, leading us to change our approach to managing this issue.

Cisco declined to name the supplier that provided the components to the company between 2005 and 2010, saying that it "stands behind the reputation of our products".

However, it has been speculated by the Wall Street Journal that Micron Technology may be the culprit.

The company - without naming names - said in a statement late last week:

Micron acknowledges that it has worked proactively over the past few years with certain infrastructure customers affected by a relatively small number of product failures arising under specific usage conditions.

It added that the chipmaker – unlike Cisco – didn't expect its bottom line to be hit by any "material charges arising out of this product issue."

It's unclear if Cisco plans to seek compensation from whomever manufactured the flawed components to cover the cost of supporting them.

The networking firm said that a number of its products were on a long list of memory component-related failures. It advised customers to carefully manage affected kit, which includes routers, switches and wireless products.

Among other things, customers are told to minimise unnecessary power cycling, conduct additional checks following scheduled maintenance activities and to closely monitor the data for all Cisco equipment that is loaded with the dodgy memory components.

"The majority of these products continue to experience field failure rates below expected levels," Cisco - which first learned of the problem in 2010 - warned customers. ®