Silicon Graphics Inc yesterday revealed that some of the R10000 Mips-based Indigo 2 workstations and Challenge servers it shipped between March and July of 1996 were defective to the extent that the systems affected had a tendency to shut down while in use. The processors were manufactured by NEC Corp in Japan. SGI's other Mips chipmaker, Toshiba Corp, was not affected. It affects less than half of the R10000 systems shipped in the period, of which there were slightly less than 4,000, according to SGI. The problem is now over and in the process of being fixed by SGI. The replacement program was the main reason for an SGI profits warning released after the markets closed yesterday stating that its first quarter revenues to September 30 will be only slightly higher than the combined revenues of SGI and Cray Research Inc, which SGI acquired back in February which would have totaled $758m. SGI wouldn't put any numbers on the revenue shortfall, or on the effect the problems would have on the bottom line, but director of Mips marketing Derek Myer admitted that earnings would be affected by this. All systems shipped since August 1 are free of the problem. The problem was with the thickness of the oxide, which got too thin in places, causing the processor to draw too much current, according to Myer. He said it caused no computational errors, just the shut-downs. The chips are in full production now and SGI is talking to NEC about future plans, but NEC will continue as the primary Mips supplier. SGI also claimed the shortfall was due in part to its most significant new product announcements in several years, coming next month, but wasn't saying what that might be. SGI has started replacing boards in systems that have showed a problem, and will replace boards in every system shipped between March and July early next month, free of charge, of course.