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Wednesday, October 27, 2010
PC Graphics Market Slumps, Intel Soars, Nvidia Makes a Comeback

Today, Jon Peddie Research (JPR) announced its estimated graphics chip shipments and supplier's market share for Q3'10.

Overall graphics chip shipments were an unseasonably one percent down from Q2'10 due to the 8.4% drop in notebook sales despite an 8.4% growth in desktop sales reflecting the increasing impact of the notebook market, according to the report. The possible cause for the decline in notebook sales could be the iPad, and the related shift from netbooks.

For the third quarter of the year 2010, shipments were 10% above the same period last year.

Embedded Graphics Processors (EPGs - Clarksdale and Pineview) from Intel showed strong growth, up 50% from Q2'10, while total IGPs shipments from all vendors slowed to a modest 1.4% growth quarter to quarter.

Overall, market shifts occurred for all vendors even though the quarter-to-quarter total shipments were basically flat.

AMD attributed its slip in market share to weakened demand and OEMs letting their GPU inventory run down to avoid being stuck with leftover processors. Due to real and perceived shortages in supply, some customers shifted their purchases to rival Nvidia. And there may have been some deemphasis on GPUs after a significant weakening of the Euro, with laptop makers settling for cheaper, integrated graphics instead. AMD graphics revenue decreased 11 percent sequentially but increased 33 percent year-over-year.

Intel reported "revenue from client chipset and other" of $1.75 billion up from $1.68 billion in Q2.

"No one knows how much cannibalization there is in tablets," said Intel President and CEO Paul Otellini, "but the numbers are relatively small". About 8 million iPads shipped in the third quarter which is 11% of an estimated 70 million notebooks and netbooks over the same period. Intel's Atom processor revenues were down 4% in Q3 which some observers are attributing to cannibalization by tablets. In June, Intel announced it would make new chips for tablets, and previewed "Oak Trail" tablets scheduled for release in 2011.

Nvidia's fiscal quarter, straddles the calendar quarters. Their next quarter ends in October 31.

Embedded Processor Graphics

With the advent of new CPUs with integrated or embedded graphics, we will see the rapid decline in deliveries for traditional chipset graphics or IGPs (integrated graphics processors,) JPR added.

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