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Sunday, August 30, 2009
More Positives Than Negatives in Q2?09 For The Graphics Add-in Board Market:JPR


Jon Peddie Research reported that the market for graphics add-in boards (AIBs) demonstrated some much-needed firmness in Q2?09, adding more evidence that demand has bottomed and a recovery is in the offing.

The quarter saw 16.81 million graphics cards shipped, up 3.0% sequentially and down 15% year over year (YoY), the latter figure presenting a substantially more moderate drop than the previous two quarters, JPR research found.

After draining down inventories in the "shock and awe" of Q4?08 and Q1?09, AIB inventories simply couldn?t go much lower. So AIB purchases at a minimum had to at least track actual consumption, and perhaps even rise a bit higher, so as to add some weight to anemic inventories. Add in the notion that buyers were finally sticking their heads up out of the foxholes ? perhaps not dropping wads of cash, but at least buying something ? and the quarter for discrete AIBs proved at least steady, if not robust.

But while they certainly will take solace in the thought that results could have been far worse, many stakeholders in the AIB market might feel a bit cheated in Q2?09, as the sister market for motherboard integrated graphics processors (IGPs) did profit from that much-hoped-for big bounce in volume (up 4%, year-over-year, as previously reported by JPR). At least for now, AIBs aren?t seeing the same extent in recovery that IGPs are.

Overall, buyers of graphics were back out en masse, but the overall graphics market?s growth figures didn?t translate as strongly to the AIB segment. They might have, had buyers been less price-conscious. But price-conscious buyers were, and that meant purchases of both "free" IGPs and low-priced AIBs got the bump in volume, not so much higher-priced AIBs, or AIB units overall.

Since the summer of ?08, AMD?s Radeon-brand graphics AIBs began giving market leader Nvidia a much tougher run for its money. Despite its renewed competitiveness, however, AMD hadn?t yet seen a sustained growth in market share, as Nvidia adamantly refused to give up any volume, aggressively cutting prices as necessary to avoid a loss in share.

But as prices settled out and AMD got its RV770 GPU (and subsequent derivatives RV730, RV790, RV740) in place across the Radeon line-up, the company did finally see a meaningful tick up in market position. JPR?s tabulations show AMD?s unit share rising from 31% in the first quarter to 35% in Q2?09, with Nvidia declining four points to 64%.


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