Nvidia GPUs Weather Tough PC Market in Q3, but Intel, AMD Suffer

Nvidia saw shipments and market share in the GPU space grow in the third quarter, but sales slowed for rivals Intel and AMD, Jon Peddie Research says.

Nvidia is weathering the negative impacts of the struggling PC market on graphics chips better than rivals Intel and Advanced Micro Devices, according to market research firm John Peddie Research.

In a report released Nov. 26, Jon Peddie said that while both Intel and AMD saw their unit shipments and market share decline in the third quarter, Nvidia saw a boost in both metrics, despite the overall weakness in a global PC market that has spread over several quarters.

Nvidia in the third quarter shipped 22.25 million PC GPUs—both discrete graphics chips and graphics technology on heterogeneous CPU/GPUs—a 19.6 percent increase from the second quarter, and its market share rose from 14.8 percent to 18.5 percent. At the same time, Intel—the world's largest GPU vendor—shipped 71.75 million units, an 8 percent drop from the second quarter, while AMD's shipments fell to 10.7 percent, to 25.43 million. Intel's market share fell from 62.2 percent in the second quarter to 59.8 percent in the third; AMD's went from 22.7 percent to 21.2 percent.

Overall, GPU shipments in the third quarter fell 4.3 percent from the second quarter, and 20 million fewer units were shipped when compared with the third quarter of 2011.

"The news was terrific for Nvidia and disappointing for everyone [including] the other major players," Jon Peddie analysts said in a statement.

In general, most news surrounding the global PC market has been bad for the past few quarters. Sales continue to shrink as consumers spend more of their money on new mobile devices, particularly tablets and smartphones, and the global economy continues to struggle. Most of the top-tier companies with close ties to the PC market—from chip makers like Intel and AMD to OEMs like Hewlett-Packard and Dell—are seeing their financial numbers taking a hit due to the contracting PC market, even as they try to expand into higher growth areas.

Analysts with IDC and Gartner said in October that third-quarter PC shipments fell by between 8 and 9 percent from the same period in 2011, and Jon Peddie analysts said that the problems in the PC market are showing up in the worldwide GPU numbers.

"GPUs are traditionally a leading indicator of the market, since a GPU goes into every system before it is shipped and most of the PC vendors are guiding down for Q4," the Jon Peddie researchers said. "The turmoil in the PC market has caused us to modify our forecast since the last report; it is less aggressive on both desktops and notebooks. The popularity of tablets and the persistent recession are the contributing factors that have altered the nature of the PC market."

Graphics chips—both discrete and CPUs with integrated graphics—are a leading indicator of what's going on in the PC market, according to the analysts. At least one, and sometimes two, GPUs are found in every PC that ships, they said.

The analysts are expecting PC graphics shipments to increase 3.6 percent between 2011 and 2016, with total shipments in 2016 hitting 608 million units.

Intel saw its numbers slip in both desktop GPU shipments—a 7 percent drop—and notebooks (8.6 percent), while AMD's numbers were a 2 percent decline in desktops and 17 percent fall in notebooks. Nvidia's desktop GPU shipments rose 28.3 percent, and notebook shipments grew 12 percent.

However, when compared with the third quarter of last year, all three saw their shipments fall—AMD by 20 percent, Intel by 14 percent and Nvidia by 0.5 percent.

AMD also saw shipments of its PC accelerated processing units (APUs) fall from the second quarter—30 percent for desktops and 4.7 percent for notebooks. Shipments of Intel's heterogeneous GPUs/CPUs in desktops dropped 7 percent, and 8.6 percent in notebooks. For Intel, 99 percent of its nonserver processors have integrated graphics, as does 67 percent of AMD's nonserver chips. AMD also sells discrete graphics.

Jon Peddie analysts said that total discrete GPUs—which include both desktops and notebooks—increased 4.6 percent from the second quarter, but fell 5.2 percent compared with the third quarter of 2011, due to the continuing issues surrounding the PC market.

Jon Peddie's report included discrete and integrated graphics for desktops, notebooks, netbooks and PC-based industrial/scientific, embedded and commercial systems, such as point-of-sale systems. It also includes tablets running x86-based chips from Intel and AMD, but does not include chips for handheld devices—such as smartphones—x86-based servers or ARM-based tablets, smartbooks or servers.