From 2024 to 2025, U.S.-based semiconductor manufacturers saw total warranty claims paid increase by 99.5%, total warranty accruals made increase by 87%, and total warranty reserves held increase by 85%. By far, this industry saw the largest degree of change in all totals, from 2024 to 2025.

Discrete GPU manufacturer Nvidia Corp. was, by far, the largest U.S.-based warranty payer in 2025. From 2024 to 2025, Nvidia's total warranty claims paid increased by an amazing 1,004%, total warranty accruals made increase by 173%, and total reserves held increased by 168%.

Our April 9, 2026 newsletter "Discrete GPU Warranty Expenses" prompted this story to go viral on the social media platform Reddit, with attention especially from gamers and AI enthusiasts.

Discrete GPU Limited Warranties

In our newsletters, we split the semiconductor industry into two sub-groups: makers of semiconductor devices, and makers of semiconductor manufacturing equipment.

The sharp rise in Nvidia's warranty costs has transformed the dynamics of the U.S.-based semiconductor industry. Over the past five years, we've seen the average warranty expense rates of the makers of semiconductor manufacturing equipment (Figure 4) fall. At the same time, we've seen a sharp rise in the warranty expense rates of the semiconductor device manufacturers (Figure 3), due to Nvidia's rise in warranty costs.

Thus, in 2025, we saw the average warranty expense rates of the U.S. semiconductor device manufacturers (Figure 3) surpass those of the semiconductor manufacturing equipment makers (Figure 4) for the first time. This is a profound visualization of the warranty costs associated with the AI boom, powered by discrete GPUs manufactured by Nvidia and Advanced Micro Devices (AMD).

In contrast, when discrete GPUs started to be used to cryptocurrency mining in the late 2010s, Nvidia and AMD were quick to specify that this was a commercial use that invalidated the limited product warranty. Furthermore, the discrete GPU manufacturers have asserted that "delidding" the GPU, a common practice among gamers, also invalidates the warranty. In contrast, Nvidia and AMD are embracing the use of their discrete GPUs to power large language models and AI, and honoring associated warranty claims.

Take a look at our newsletter "Discrete GPU Warranty Expenses" for more information on discrete GPUs, "add-in card" (AIC) partners using Nvidia and AMD chips, and the RAM shortage driving up chip and component prices.

Methodology

To create this newsletter, we identified 163 U.S.-based manufacturers of semiconductors and semiconductor manufacturing equipment, which reported product warranty expenses between 2003 and 2025. In 2025, 34 semiconductor manufacturers reported warranty expenses.

We perused the annual reports and quarterly financial statements of each manufacturer, and gathered three key warranty metrics: the amount of claims paid, the amount of accruals made, and the year-end balance of the warranty reserve fund.

In addition, we gathered data on each manufacturer's total product sales revenue, and used these to calculate two warranty expense rates: claims as a percentage of sales revenue (the claims rate), and accruals as a percentage of product sales revenue (the accrual rate).

We split the industry into two groups, the chip makers, and the makers of the equipment used to make the chips.

The largest U.S.-based makers of semiconductor manufacturing equipment were Lam Research Corp. and Applied Materials Inc.

Unfortunately, Applied Materials ceased reporting its warranty claims and accruals in 2025, only reporting a quarterly end-balance for the warranty reserve fund.

The largest U.S.-based semiconductor device manufacturers were both discrete GPU makers, Nvidia Corp. and Advanced Micro Devices Inc.

Warranty Claims Totals

Figure 1 shows the total warranty claims paid by the U.S.-based semiconductor industry, from 2003 to 2025.

In 2025, the U.S. semiconductor industry paid $1.54 billion in warranty claims, double the amount paid in 2024.

Nvidia paid $894 million in warranty claims in 2025, an increase of 1,004% from 2024's total of just $81 million. That's a huge leap in just one year, as Nvidia provides limited warranty support for the discrete GPUs in data centers powering AI.

AMD paid $238 million in warranty claims in 2025, a little more than double 2024's total of $110 million.

Along with increased GPU sales driving up warranty costs, the RAM shortage has driven up the cost of chips and their components. Higher sales means more frequent claims, and higher parts and product costs mean more expensive repairs and replacements under warranty.

Lam Research paid $231 million in warranty claims in 2025, a 29% increase from 2024.

Coherent Corp. paid $33 million in warranty claims in 2025, a -6% decrease from 2024. Teradyne Inc. paid $18 million in claims, a -25% decrease. IPG Photonics Corp. paid $17 million, a 10% increase.

Onto Innovation Inc. paid $13 million in claims in 2025, a 19% increase from 2024. Kulicke and Soffa Industries Inc. paid $12 million in claims, a -8% decrease. Axcelis Technologies Inc. paid $12 million in claims, a -2% decrease.

Warranty Accrual Totals

Figure 2 shows the total warranty accruals made by the U.S.-based semiconductor manufacturers, from 2003 to 2025.

In 2025, the U.S. semiconductor industry set aside $3.37 billion in warranty accruals, an 87% increase from 2024.

Nvidia set aside $2.59 billion in warranty accruals in 2025, an increase of 173% from 2024. AMD set aside $358 million in warranty accruals in 2025, a 68% increase.

Lam Research set aside $268 million in warranty accruals in 2025, a 17% increase from 2024.

Coherent set aside $26 million in warranty accruals in 2025, a -13% decrease. Teradyne set aside $24 million in warranty accruals, a -20% decrease. ACM Research Inc. set aside $14 million in accruals, an 18% increase.

IPG Photonics set aside $12 million in warranty accruals in 2025, double 2024's $6 million in accruals. The fiber laser manufacturer did not explain this increase in its 10-K annual report.

Onto Innovation set aside $11 million in warranty accruals in 2025, a -11% decrease. Kulicke and Soffa set aside $10 million in accruals, a -17% decrease.

Warranty Expense Rates

Take a look at Figure 4 in last week's newsletter, "U.S. Electronics Warranty Report," for the average warranty expense rates of the whole U.S. semiconductor industry.

Figure 3 shows the average quarterly warranty claims and accrual rates for the U.S.-based semiconductor device manufacturers, from 2003 to 2025.

Over 23 years, the U.S.-based semiconductor device manufacturers had an average warranty claims rate of 0.37%, with a standard deviation of 0.16%.

In 2025, the average warranty claims rate was 0.39%. The quarterly averages ranged from 0.21% in the first quarter, with a relatively sharp rise to 0.78% in the fourth quarter.

Over 23 years, the chip manufacturers had an average warranty accrual rate of 0.44%, with a standard deviation of 0.25%.

In 2025, the industry had an average accrual rate of 1.09%, due to Nvidia's increased total accruals. On the high side, the average accrual rate was 1.62% in the second quarter of 2025, and 1.44% in the fourth quarter. On the low side, the average accrual rate was 0.40% in the third quarter. Overall, in 2025, we saw more volatility in this warranty metric than ever before.

Figure 4 shows the average warranty expense rates for the U.S.-based semiconductor manufacturing equipment makers, from 2003 to 2025.

Over 23 years, the semiconductor manufacturing equipment industry had an average warranty claims rate of 1.95%, with a standard deviation of 0.80%, and an average warranty accrual rate of 1.99%, with a standard deviation of 0.66%.

In 2025, the industry had an average warranty claims rate of 0.53%, and an average warranty accrual rate of 0.58%. These averages fell from 2024 to 2025, in part because Applied Materials, one of the largest manufacturers in this industry, ceased reporting.

Because of this, in 2025, we saw the average warranty accrual rate of the chip manufacturers surpass that of the equipment manufacturers for the first time.

Warranty Reserve Balances

Figure 5 shows the total warranty reserves held by the U.S.-based semiconductor manufacturers, from 2003 to 2025.

At the end of 2025, the U.S.-based semiconductor manufacturers held $3.80 billion in warranty reserves, an 85% increase from the end of 2024.

Nvidia held $2.71 billion in warranty reserves at the end of 2025, an increase of 168% from the $1.01 billion held in reserves at the end of 2024.

AMD held $308 million in warranty reserves at the end of 2025, an increase of 64% from the end of 2024.

Applied Materials held $346 million in warranty reserves at the end of 2025, a -5% decrease from the end of 2024. Lam Research held $248 million in reserves, a -3% decrease.

IPG Photonics held $31 million in warranty reserves at the end of 2025, a -8% decrease from 2024. Coherent held $27 million in warranty reserves, a -30% decrease. Teradyne held $19 million in reserves, a -54% decrease. ACM Research held $19 million in reserves, a 50% increase.

Axcelis Technologies held $14 million in warranty reserves at the end of 2025, a -24% decrease. Veeco Instruments Inc. held $10 million in reserves, a 6% increase. Onto Innovation held $10 million in reserves, a -5% decrease. Monolithic Power Systems Inc. Held $10 million in reserves at the end of 2025, an 87% increase from the end of the year prior.

Check out the rest of our series of 23-year charts:

Vehicle Sector

• 23rd Annual Product Warranty Report
• U.S. Passenger Vehicle Warranty Expenses
• U.S. Truck & Bus Warranty Expenses
• U.S. Auto Parts & Powertrain Warranty Expenses
• U.S. Aerospace Warranty Expenses

Building Trades Sector

• U.S. New Home & Building Materials Warranty Expenses
• U.S. HVAC & Appliance Warranty Expenses Expenses
• U.S. Power Generation Equipment Warranty Expenses

Electronics Sector

• U.S. Electronics Warranty Report