The last time Advanced Micro Devices (NYSE: AMD) posed any real threat to Intel (Nasdaq: INTC), AMD had an impressive batch of innovation on its hands in the Athlon 64 architecture while Intel was exploring a dead end with the now-defunct and orphaned Pentium 4 series.

Well, here we go again: AMD has just introduced the first few flavors of its long-awaited Fusion architecture, and Intel has messed up its own revolutionary re-creation. Support chips for the Sandy Bridge line of graphics-crunching CPUs turned out to have a serious design flaw that would kill the performance of storage devices over time, and a wholesale recall is in order.

This is the most expensive recall in Intel's history, far ahead of the $475 million write-off for the infamous FDIV bug in the original Pentium. Dell (Nasdaq: DELL) is looking into a plan of action, Hewlett-Packard (NYSE: HPQ) isn't saying much about it, Samsung will repair or replace affected computers, and Apple (Nasdaq: AAPL) hasn't introduced any Macs with Sandy Bridge chips inside yet. No big deal for computer makers, I say; Intel foots the bill for any uncomfortable recall situations here. The effect on computer builders will be limited since only a small number of systems have made it all the way to consumers so far, making this more of a delayed launch issue for Intel itself.

The bug will reduce Intel's first-quarter sales by approximately $300 million as the faulty chips are thrown away and replaced with an improved version. The total cost for the whole affair should land around $700 million, and "full volume recovery" isn't expected until April.

The costs are a minor concern for Intel's shareholders, but that delay gives AMD a three-month window of opportunity to do some damage with those Fusion chips. Only problem, thanks to its ouster of CEO Dirk Meyer, is that AMD is a rudderless ship at the moment and ill prepared to take advantage of Intel's slip-up.

Great timing, guys. I hope the CEO search has unearthed some truly remarkable talent and that your candidate can hit the ground running at 110 miles per hour. Intel doesn't serve up a lot of these disruption opportunities on a silver plate, you know.