Chip maker Intel has warned that it expects a design flaw in its new line of processors to cost the company $1 billion.

In a statement published on its website last night, Intel confirmed that it was halting shipments of the Intel 6 Series support chip, code-named ‘Cougar Point’. Intel found that, in some cases, the chip causes linked devices including hard disks and DVD drives to malfunction.

The Cougar Point support chip is one of the company’s new Second Generation Intel Core processors, code-named ‘Sandy Bridge’ that went on sale in January. The chipset compines traditional CPU functions with graphical processing capabilities.

Intel says it has corrected the problem, and shipments will re-commence in late February. However, the cost of repairing and replacing existing chipsets will cost the Silicon Valley-based provider approximately $700 million. Having to postpone shipments will negatively impact Intel’s coming financial quarter by an estimated additional $300 million.

Intel’s disclosure of the Sandy Bridge design flaw has already caused problems for computer makers that use the chipset. Samsung has confirmed that it will offer full refunds to customers that bought PCs containing the faulty processor. The cost of the recall will be swallowed by Intel.

"Intel stands behind its products and is committed to product quality," the company said in a statement. It added that it believed "relatively few consumers are impacted by this issue".