Gerhard Potgieter

Last year’s recall of overheating Xbox 360s was caused by Microsoft trying to bypass  ATi and going straight to Taiwan Semiconductor Manufacturing to save cash, according to analyst outfit Gartner.

Bryan Lewis, research vice president and chief analyst at Gartner, said that the overheating problem in the Xbox 360s was caused by Microsoft trying to avoid using ATi.  It designed the graphics chip on its own, cut ATi out and took it to Taiwan Semiconductor Manufacturing to make.

However the chip overheated and in the end Microsoft had to go back to ATi  to redesign the chip so that it worked. Lewis that if Microsoft left the graphics processor design to ATi in the first place it could have designed a graphics processor that dissipates much less power.

It cost Microsoft $1 billion to conduct the recall.