Cisco prepares for $163m hit on Intel Atom bombs

Network router and switch vendor Cisco has set aside millions of dollars over the next year for remediation measures with equipment containing expected-to-fail Intel Atom processors.

In its latest quarterly results, the networking giant said it will take a pre-tax charge to product cost of sales of US$125 million (A$163 million), to remediate future anticipated failures of a clock-signal component used in many of its products.

Earlier this year, Intel admitted its Atom C2000 range of processors contained a flaw that can cause the low pin count (LPC) bus clock generator to fail under certain conditions.

If the LPC clock fails, the affected device is rendered inoperable and cannot be booted.

Cisco is a large user of low-power Intel Atom processors for its network devices, including popular gear like its ASA, Nexus, and Meraki devices.

The company said it would provide replacement products for devices with Intel Atoms that are under warranty, or are covered by service contracts as of November last year.

It is not clear if Cisco will ask Intel for compensation for the faulty Atom processors.

Intel Atom processors are found in equipment from many vendors such as Synology, HP, Juniper, Dell, Supermicro, and NEC.

They are also used in infotainment systems within cars made by German luxury manufacturers BMW and Mercedes.