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Tuesday, April 28, 2009
Intel and Nvidia Come Roaring Back in Q1'09 According to Jon Peddie Research


Jon Peddie Research today announced estimated graphics shipments and supplier market share for the first calendar quarter of 2009, with Nvidia and Intel to post positive sales.

Graphics chips (GPUs and IGPs) are the leading indicator of the PC market. The GPUs go into a system before it becomes a PC and gets into the hands of the customer.

In Q3 and Q4 of 2008 the channel stopped ordering GPUs and depleted inventory in anticipation of a long drawn out worldwide recession. But, no recession, no matter how severe results in zero sales. The world continued to turn and the consumers continued to buy, albeit they bought less.

So by Q1'09, inventories were depleted and the channel and OEMs had to start buying. The net result was Intel and Nvidia were the big winners, breaking an eight year seasonal trend that dictated negative sales from Q4 to Q1. This year Q1 shipments were up.

Year to year things were not so great. Shipments dropped to 74.9 million units, -21.1% from this quarter last year -- and not everyone fared as well as others.

Things probably aren't going to get back to the normal seasonality till Q3 this year, and we won't hit the levels of 2008 until 2010, and people still need to buy things. Old computers will fail, new employees will be hired and need machines, and of course software upgrades like Windows 7 will be coming along.

Jon Peddie are still predicting an upturn in the PC market in Q3 and Q4 and in particular for the graphics market (which serves not just PCs but aerospace and automotive, industrial systems, medical systems, kiosks and POS). "We are optimistic because these are seasonally the best quarters," the reaserch firm said.

Jon Peddie also expect ATI & Nvidia to introduce new products that will stimulate buyers? appetites. GPUs will be based on 40nm which will be exciting and performance enhancing. Sales will be also boosted by the depleted inventories that will need to restock for back-to-school, and the holiday madness. Apple's Snow Leopard, and Windows 7 are also expected to help stimulate new purchases in the fall.

In other words, the cleaning out of old inventory, both in the electronics, automotive, and real-estate markets should be pretty well completed by the end of the summer.


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