Graphics Cards Shipments Way Down in Q4 2008

Like the rest of the economy, shipments of computer graphics chips were way down for the fourth calendar quarter of 2008.

According to numbers from John Peddie Research, total shipments of GPUs for Q4 2008 was 72.35 million -- down dramatically compared to the same quarter last year’s 100.5 million GPUs shipped. In the previous quarter, Q3 2008, 111.26 million units shipped represent a 34 percent drop quarter to 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 JPR in Tiburon, Calif.

In JPR’s Q3 to Q4 numbers spanning back to 2001 show overall GPU market growth each consecutive period until 2008. This is the first time Q4 shipments have decreased compared to Q3 since the year 2000. Year-over-year growth fell 28 percent drop from 2007.

While there was an undeniable dip in Q4 2008, the drop was made all the more dramatic as Q3 2008 saw surprisingly strong numbers, which were described as, “unusually high, even for the traditionally high third quarter.” JPR says that vendors in related industries saw the same scenario playing out -- a robust third quarter and a much slower fourth quarter.

“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,” added Peddie. “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.”

Both AMD and Nvidia saw slight increases in market share from Q3 to Q4, though Intel still has the lion’s share at still just under half of all GPUs shipped.

Although notebook shipments have now surpassed those of desktop computers, there are still a greater number of desktop GPUs shipped. In the fourth quarter of 2008, 37.45 million units shipped for the desktop, as compared to the 34.89 million units shipped for the notebook. This could be explained by the combination of both discrete graphics cards installed in desktops that already feature an IGP, and also by the hardcore who run SLI and Crossfire configurations.

Peddie doesn’t expect the slump to end just yet, saying, "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."

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  • joex444
    Should market SLI better. Make people buy 2 GPUs, that'll boost sales.
  • Blessedman
    People expect better then what they are delivering, Simple answer.
  • TheViper
    Either drop margins to just 1-2% or provide bundling with great content providers like Valve, Epic and Activision-Blizzard.

    This will keep sales up, though may hurt profits but will do a lot for brand recognition and loyalty which can weather the recession.