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Intel hit with three lawsuits over chip security

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Intel, which has lost billions of dollars in market value this week after revelations of chip vulnerabilities that have opened up most of the world’s computing devices to the risk of hacking, is now facing at least three related lawsuits — one of which estimates damages of more than $15 billion.

One of the lawsuits, filed Wednesday in the U.S. District Court in San Jose, seeks class-action status on behalf of all Intel customers who bought a defective CPU. The suit claims that patches being released by Intel and others are inadequate because security researchers have said the fixes will slow down computers.

“In essence, Intel x86-64x CPU owners are left with the unappealing choice of either purchasing a new processor or computer containing a CPU that does not contain the Defect, or continuing to use a computer with massive security vulnerabilities or one with significant performance degradation,” the lawsuit says.

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Intel disputed that point in a news release this week, saying “Apple, Amazon, Google and Microsoft are among those reporting that they are seeing little to no performance impact.” The companies have reportedly been working on fixes for the flaws, dubbed Meltdown and Spectre, for months.

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Thursday, the Santa Clara chip giant said it “continues to believe that the performance impact of these updates is highly workload-dependent and, for the average computer user, should not be significant and will be mitigated over time.”

Tech news site the Register was the first to report Tuesday about the security flaws. Meltdown is specific to Intel chips and could allow hackers to access a computer’s memory. Spectre, which affects Intel, AMD and ARM chips, could let hackers trick applications into handing over computer users’ information.

The other lawsuits were filed in Oregon and Indiana and are also seeking class-action status. All three lawsuits accuse Intel of knowingly selling core processors with security defects.

“Every aggrieved consumer misled by Intel’s intentional failure to disclose the material defect in its microchips as alleged in this complaint suffered an actual ascertainable loss of the purchase price they paid for their microchip,” says the suit filed Thursday in Oregon, which seeks national class-action status.

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That lawsuit says “the amount in controversy exceeds $15 billion, based on $200 statutory damages per consumer and Intel’s estimated 2017 fourth quarter sales revenue of $16.3 billion.”

Intel shares are up about 1.2 percent Friday, to $44.96, after falling as much as nearly 7 percent this week after the Register report and the subsequent follow-up by security researchers. AMD shares, which rose about 10 percent over the past few days, are down about 2.5 percent Friday to $11.82.

Photo: Intel headquarters in Santa Clara. (Mercury News archives)

Tags: chips, Intel, Lawsuits, Meltdown, Security, Spectre

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