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Tuesday, February 03, 2009
 Computer Graphics Chip Shipments Dive in Q4 '08
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Message Text: Jon Peddie Research (JPR) announced estimated graphics shipments and supplier market share for the fourth calendar quarter of 2008.

GPUs are used in industrial and medical systems, point of sale terminals, kiosks, digital signs, and PCs. And, in the case of over one third of all PCs being shipped today, more than one GPU is being used. Total shipments of GPUs in for Q4?08 was 72.35 million. During the same quarter last year, 100.5 million GPUs shipped, and in the previous quarter, Q3 ?08, 111.26 million units shipped representing a 34% drop quarter to quarter and a 28% drop year over year, the research firm reported.

This is the first time Q4 shipments have decreased compared to Q3 since the year 2000.

Everyone in the market suffered reduced shipments - some suffered more than others. In this quarter, Nvidia has taken back some market share from AMD's ATI division.

"While the quarterly results for Q4 '08 are obviously unusual, it is perhaps slightly less surprising considering that Q3 was also a surprise in the other direction," Jon Peddie commented. "Shipments for Q3 ?08 were unusually high, even for the traditionally high third quarter. In talking to vendors in related industries we have seen the same scenario playing out - a robust third quarter and a much slower fourth quarter."

The desktop has been on a slow but steady glide path down as the desktop market seeks a new level. The rate of decline accelerated at the end of 2008. It is hoped that the desktop market will level off in 2009 as some desk workers rely on to workhorse desktop machines and companies take advantage of attractive prices for more powerful desktop machines.

Nvidia has held a slight edge in the desktop segment with a market share of 37.9%. AMD increased its market share on the desktop from 20.3% in the third quarter to 21.4% in the fourth quarter. Given, the tough circumstances of this quarter, AMD?s increase is no mean accomplishment.

In the fourth quarter of 2008, 37.45 million units shipped for the desktop, a 39.5% drop compared to the previous quarter. In comparison, 34.89 units shipped for the notebook. Even though shipments of notebooks are reaching the cross over point compared to desktop machines, there are still more desktop graphics devices shipping than notebook graphics devices because desktops are more likely to have more than one graphics board to support Crossfire and SLI configurations, also because of double connect ? machines that have both an IGP and discrete graphics chip in the same system.

While not exactly a bright spot for AMD, Intel and Nvidia did see slight increases in notebook shipments. Overall notebooks were down 29% compared to the previous quarter.

"The fourth quarter is usually a positive quarter for the computer industry. There has obviously been some inventory problems in the quarter as sales failed to live up to the optimistic expectations of the third quarter, 2008.," said Dr. Jon Peddie, president of Jon Peddie Research in Tiburon California. "Vendors were bracing for a slower than usual quarter due to economic factors, but performance this quarter was surprisingly low. Put simply, the market stalled in the fourth quarter. Due to the worldwide financial market meldtown, the U.S. housing market meltdown, layoffs, and media reports, the consumer has hunkered down to wait out the storm.

"We?re forecasting a strong Q3 and Q4 for 2009 and bracing for what will probably be the worst Q1 and Q2 decline we've seen since the Internet bubble burst of 2000."
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