The U.S. recession and global downturn began affecting computer graphics chip shipments in a big way in the fourth quarter of 2008, as total GPU shipments dropped by 38.91 million from the third quarter, according to Jon Peddie Research. However, the quarter also presented some good news for Nvidia, which took a few points of market share from Intel and AMD. At the same time, AMD through its ATI graphics business increased its market share in the desktop segment.With
consumers and businesses cutting back on desktop and laptops purchases in an
increasingly recessionary environment, the number of shipped graphics
processing units dropped by 35 percent between the third and fourth quarters
of 2008, from 111.26 million to 72.35 million, according to a new report.
The Jan.
29 report from Jon Peddie Research also said the decline affected all vendors, including Advanced Micro Devices, Intel, Nvidia,
Matrox, SiS and VIA/S3, although some faced steeper market-share erosion than
others.
The last
time that overall fourth-quarter GPU shipments declined compared to the third
quarter, it was the bursting of the tech bubble of 2000. In 2007, the segment
experienced 10.62 percent growth from third quarter to fourth quarter. The
decline in chip shipments reflects a similar fourth-quarter tumble in notebook
and desktop shipments.
Despite
the overall declines, a few companies managed to squeeze out a few more points
of market share, including Nvidia, which saw a 2.9 percent increase despite a
sales drop from 30.93 million to 22.20 million units.
Nvidia
gained those points at the expense of Intel and AMDs ATI graphics business, which saw
drops of 1.6 and 1.3 percent, respectively.
Nvidia
has had a very strong channel management team for several years, and been very
quick to react to ODM [original design manufacturers] and OEM requests,
typically making decisions and putting plans into action within 24 hours, said
Peddie said in an interview. The short answer is: nimbleness, product spread,
inventory to fill spot orders, and brand, brand, brand.
Other
analysts seconded that reasoning.
Today,
Nvidia dominates the discrete graphics product stack top to bottom, and in integrated
graphics, its 9400M/Ion platform is disrupting the mobile world with wins at
Apple and Dell and in upcoming netbooks, Hans Mosesmann, an analyst at Raymond
James, wrote in a Jan. 28 research note.
We
believe Nvidias upcoming 40-nanometer-based GPUs are set for a timely May/June
launch and that notebook OEMs have already started to design these products in
today and likely ahead of AMDs own 40nm-based products,
Mosesmann added.
Nvidia
kept what the report describes as a slight edge (a 37.9 percent market share)
in the desktop segment, while AMD raised its market share in the
segment by 1.1 percent between the third and fourth quarters.
Shipments
of desktop units dropped 39.5 percent between the third and fourth quarter.
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While
desktops are more likely to feature multiple graphics boards in a single
computer, the number of units shipped still remains higher than notebook units,
at 37.45 million versus 34.89 million for the fourth quarter. Notebook unit
shipments for the quarter were down 29 percent.
Nvidia
has been looking to expand its offerings in the notebook and netbook markets as
well.
The
report credits the worldwide financial market meltdown, the U.S. housing market meltdown, layoffs
and media reports as contributing factors in the sales decimation.
It also
features a prediction from Peddie: Were forecasting a strong [third quarter]
and [fourth quarter] for 2009 and bracing for what will probably be the worst
[first quarter] and [second quarter] decline weve seen since the Internet
bubble burst of 2000.
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