Quanta Computer, the world?s largest contract maker of notebook computers, sued AMD, alleging the chipmaker sold defective products. According to court documents obtained by Bloomberg, AMD and its ATI Technologies Inc. unit sold chips that didn't meet heat tolerances and were unfit for particular purposes. The chips were used in notebooks Quanta made for NEC and caused the computers to malfunction, according to the filing.

"Quanta has suffered significant injury to prospective revenue and profits," the company said in the complaint. Quanta is seeking a jury trial and damages, according to court papers.

AMD says that it disputes the allegations in Quanta's complaint and believes they are without merit, adding that that Quanta used the same chips in a different computer for NEC and didn't have the same problems.