GPU shipments hit hard by financial crisis

Written by Tim Smalley

January 31, 2009 // 8:33 a.m.

Tags: #4q08 #card #crisis #decline #financial #fourth #graphics #jon #market #peddie #quarter #research #shipments #third

Following hints that GPU shipments were down in the fourth quarter – a direct result of the economic slowdown – a report released by Jon Peddie Research this week all but confirms the worries. According to JPR’s estimated graphics cards shipments, the market declined by almost 35 percent between the third and fourth quarters.

Total GPU shipments for the fourth quarter amounted to 72.35 million, while the previous quarter’s estimates were pegged at 111.26 million units shipped. It’s also the first time shipments have dropped between the third and fourth quarters since the year 2000.

That’s not good news for the industry, but it’s not likely to get better any time soon because Peddie suggests that we may witness the worst first and second quarter decline since the dot com bomb of 2000. He does expect the market to get on the road to recovery in the third and fourth quarters of this year, though.

Peddie attributed the declines to the global economic slowdown and lack of consumer confidence – par for the course at the moment. He said vendors were preparing for a bad quarter, but was still surprised by the way the market stalled so dramatically.

Looking through the figures provided by JPR, SIS and Matrox were hit hardest by the economic slowdown, but AMD wasn’t far behind in the squeeze – its shipments declined by almost 39 percent. Nvidia actually suffered the least during the fourth quarter, as its sales dropped by just 28 percent and as a result it managed to steal market share from both AMD and Intel.

The desktop graphics market has been on a slow decline for a while now, but Peddie says that the decline accelerated during the latter half of 2008. Despite this, it’s expected that sales will level off during 2009, because there is still significant demand for desktop GPUs in certain markets.

Both AMD and Nvidia gained market share from Intel in the desktop segment during the fourth quarter and their shipments now represent 21.4 and 37.9 percent of the market respectively. “Given the tough circumstances of this quarter, AMD's increase is no mean accomplishment.” he said.

The one thing that really surprised us here was the inroads Nvidia made into the market while the rest of the industry felt the pinch in quite emphatic fashion. Its low-cost GeForce 9400M integrated graphics chipset has really hit the market at the right time and this is where the company has most likely made up the most ground - we expect this trend to continue through the first few quarters of 2009 when more GeForce 9400M design wins are announced by system builders.

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