Computer Graphics Chip Shipments Dive in Q4 '08
according to Jon Peddie Research
Chickens come home to roost for AMD, Intel, and Nvidia
TIBURON, CA - January 29, 2009 - Jon Peddie Research (JPR), the industry's research and consulting firm for graphics and multimedia, today 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 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 -2% drop year over year.
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. For more detail see Table 2.
Table 2: Total graphics chip market shares for Q4 '08
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. 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 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%. The company has gained on Intel. AMD also raised 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, and also because of double connect - machines that have both an IGP and discrete graphics chip in the same system.
"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 meltdown, 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 pop of 2000."
Pricing and Availability
The Q4'08 edition of Jon Peddie's Market Watch is available now in both electronic and hard copy editions. The annual subscription price for Jon Peddie's Market Watch is $3,500 and includes four quarterly issues. Full subscribers to JPR services receive Tech Watch (the company's bi-weekly report) and a copy of Market Watch as part of their subscription. For information about purchasing Market Watch, please call 415/435-9368 or visit the Jon Peddie Research website at http://www.jonpeddie.com.
About Jon Peddie Research
Dr. Jon Peddie has been active in the graphics and multimedia fields for more than 30 years. Jon Peddie Research is a technically oriented multimedia and graphics research and consulting firm. Based in Tiburon, California, JPR provides consulting, research, and other specialized services to technology companies in a variety of fields including graphics development, multimedia for professional applications and consumer electronics, high-end computing, and Internet-access product development. Jon Peddie's Market Watch is a quarterly reports focused on the market activity of PC graphics controllers for notebook and desktop computing.