After numerous reports about the exceptionally high Xbox 360 failure rate, Microsoft was forced to allocate 1 billion dollars to fix it.
Almost one year later, we have finally come to know the true story behind the historic RROD epidemic.
During the Design Automation Conference, Bryan Lewis, research vice president and chief analyst at Gartner, disclosed that it all begun with a single Microsoft's decision aiming to cut design costs for their Xbox 360 graphics chip.
According to Bryan Lewis, the epidemic happened because "Microsoft wanted to avoid an ASIC (application-specific integrated circuit) vendor", so they designed their own graphics chip and sent it directly to Taiwan Semiconductor Manufacturing for production.
Normally, semiconductor chips are designed on two stages. The first of them is the Schematic design where engineers draw a symbolic representation of the circuit. This should have been done by Microsoft. The second stage is PCB Layout design. In this stage, the abstract representation of the circuit is converted to real life Printed Circuit Board through a delicate and complex design process. Apparently, Microsoft decided to design its own PBC, but failed and ended up with an RROD epidemic.
"Had Microsoft left the graphics processor design to an ASIC vendor in the first place, would they have been able to avoid this problem?", Lewis asked before answering himself. "Probably. The ASIC vendor could have been able to design a graphics processor that dissipates much less power."
To fix the problem, Microsoft went back to an unnamed ASIC vendor based in the United States and redesigned the chip, Lewis added. (rumors have it that the ASIC vendor is most likely the former ATI, now part of AMD.)
Moral of the story: by going cheap and trying to save tens of millions of dollars in ASIC design costs, Microsoft ended up paying more than $1 billion for its Xbox 360 recall.
