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Graphics Cards Shipments Way Down in Q4 2008

By - Source: Tom's Hardware US | B 18 comments

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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  • -5 Hide
    joex444 , January 29, 2009 10:29 PM
    Should market SLI better. Make people buy 2 GPUs, that'll boost sales.
  • 6 Hide
    Blessedman , January 29, 2009 11:27 PM
    People expect better then what they are delivering, Simple answer.
  • 0 Hide
    TheViper , January 29, 2009 11:40 PM
    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.
  • 3 Hide
    xsamitt , January 30, 2009 12:35 AM
    I also feel that the drm is playing a part in all this.I hate consoles but at least they don't limit the installs.We all know the gaming market is most certianly playing a part in all this.I know it is for me.
  • 4 Hide
    Tindytim , January 30, 2009 1:19 AM
    I'd be more interested in seeing how this stacks up with the averages of other industries.

    Everything is down, telling me that the video card industry is down isn't all that descriptive.
  • 2 Hide
    tmc , January 30, 2009 3:15 AM
    If you notice the trend, there was a pop when most motherboards switched to pci-e interface (2003-2005).. but the second shoe dropped a couple years later with vista.. do you really think consumers would just splurge on new graphics cards for direct-x 10.X and open gl 3+?

    Add to that a global recession.. and this industry will be lucky if it treads water for a couple of years. Maybe the industry will find it's footing again when Windows 7 arrives & 2gb graphics cards are common & cheap (about $100-150).

    Intel and AMD already know sales of procesors are falling. Though, they still ship them and let wholesalers and retailers handle the losses.. but with $400+ graphics cards and $600+ processors, it's harder to take a loss, so you will see pushback by wholesalers & retailers if demand is not there. The high end of the market will see major reduction in sales.
  • 0 Hide
    tayb , January 30, 2009 3:21 AM
    High end graphic cards aren't going to fly for the next several years and possibly beyond. Going to take a long time before the economy is back to where it was and the Tech industry will take many more hits until it is over.

    Not many people are willing to shell out $250+ for a GPU when they can get an entire gaming console for the same price. Just not cost efficient at this time.
  • 1 Hide
    enforcer22 , January 30, 2009 8:11 AM
    Well i for one have been and will continue to buy the new graphics card as long as there is a game with out DRM on it that makes my frames drop. Right now i have a 4870x2 2gig card so that will be a bit in the future but this spring ill be building a whole new system (upgradeing in my book) though i really wish games that take advantage of large areas like sins of a solar empire would multi thread thier games since 80% of the lag i get in those types of games is simply AI involvment and super large fleets of units. a Single cpu has a hard time keeping up.

    I however hardly ever play anything that comes with my video cards or sound cards. I remember they always use to bundle up to 4 games in those box's but never played one. I would preffer if they simply dropped the price instead of putting games in. It wont stop me from buying a new computer every 6 months to a year but it would be nice if it was a tad cheaper.

    tayb Not many people are willing to shell out $250+ for a GPU when they can get an entire gaming console for the same price. Just not cost efficient at this time.


    I would preffer the video card. It would go in my system i already have and let me play my current games at higher details (the one i have that makes me play in lower then max) and any future games in the same detail. If i got a crappy console i would need to buy all new games and thats not cost efficient at this time. Not to mention i dont want to take the quality hit.
  • 1 Hide
    jawshoeaw , January 30, 2009 8:38 AM
    I think recesion is about 99% of this. (expensive) Graphics cards are in almost every case a luxury. I haven't gone to a movie theater in about 4 months for the same reason. $1 to rent and $25 to run Vista. Actually, despite the hype, Vista Aero runs fine on my integrated graphics on a two year old board (nvidia 6150)

    Regarding SLI, when have two of the old ever been better than one of the new? Why don't mobos have like 8 sockets for CPUs?
  • 0 Hide
    nekatreven , January 30, 2009 1:02 PM
    BlessedmanPeople expect better then what they are delivering, Simple answer.


    ^ +1 That, and a lot of people are just broke.
  • 0 Hide
    Ogdin , January 30, 2009 2:26 PM
    In the last year the high end performance that was reserved for the 600 cards dropped into the sub 200 range. The only reason to buy a 600 card these days is if you wanna play at 2560x1600 or shine your epeen.People expecting them to deliver better than that need to pull there head outta there arse.
  • 0 Hide
    tayb , January 30, 2009 2:46 PM
    EnFoRceR22I would preffer the video card. It would go in my system i already have and let me play my current games at higher details (the one i have that makes me play in lower then max) and any future games in the same detail. If i got a crappy console i would need to buy all new games and thats not cost efficient at this time. Not to mention i dont want to take the quality hit.


    And for every person that would prefer the video card like yourself there are dozens of people that would prefer to end the upgrade cycle and switch to a console.

    And when you get a "crappy" console (as if they were actually crappy in ANY way) you don't need to take your old PC and all the games and throw them in the trash. Those games will still play on the current system you know...

    Notice the sales of consoles INCREASED in quarter 4 compared to the 34% DECREASE in GPU sales.
  • 0 Hide
    average joe , January 30, 2009 5:52 PM
    I think that is mostly the economy. So many folks have lost their jobs in the US that even if you are working someone in your family isn't. It's not a good time for impulse purchases. Add to that the fact that we have a hardware glut on the market right now. Any Core 2 Dual or Quad with an 8800gt or newer is capable of playing every game except Crysis at Max settings for anything up to a 22" screen.

    ATI, Nvidia, and Intel are just too good at their jobs. We are in performance heaven right now. I for one appreciate it greatly.
  • 0 Hide
    kashifme21 , February 1, 2009 11:00 AM
    taybAnd for every person that would prefer the video card like yourself there are dozens of people that would prefer to end the upgrade cycle and switch to a console. And when you get a "crappy" console (as if they were actually crappy in ANY way) you don't need to take your old PC and all the games and throw them in the trash. Those games will still play on the current system you know...Notice the sales of consoles INCREASED in quarter 4 compared to the 34% DECREASE in GPU sales.



    rofl i would never buy a console.. when for the same price i can get a graphics card which is 5times as powerful as the console and allows me backward compatibility.

    While the games cost USD10 cheaper.

    I'd say getting a ps3 or a Xbox is a bad deal.
  • 0 Hide
    enforcer22 , February 2, 2009 8:28 AM
    taybAnd for every person that would prefer the video card like yourself there are dozens of people that would prefer to end the upgrade cycle and switch to a console. And when you get a "crappy" console (as if they were actually crappy in ANY way) you don't need to take your old PC and all the games and throw them in the trash. Those games will still play on the current system you know...Notice the sales of consoles INCREASED in quarter 4 compared to the 34% DECREASE in GPU sales.


    they are by no means worth it for me since all the game i would even buy on a console are available on PC and at much better quality so yes i wouldnt buy a crappy console there is no advantage to being stuck in late 96 early 97 graphics ability. Sorry but good enough isnt good enough for me. and really i know this isnt the way it is but any gamer i know wont even touch a console unless they just seriously dont care about anything about the game other then the story. Maybe i just know people who care about the whole package when it comes to games. Graphics sound ect. i could start up my about4 year old comp and have what a console is going to give me and more.

    So yeah if i wanted graphicly stripped down games i would go buy a xbox and ps3 paperweight.

    Now if your just someone who just wants to game here and there and its not important sure whatever xbox whatever.

    Besides my point with buying a console not being cost effective for me. What is a $300 or more console going to do with out the $60 games to go with it. Me being able to keep my PC games is irrelavent unless im going to be able to play them on a console. Unless you ment to buy a console to simply look at which is about all the use it would get in my house. So $1000 later ill have a console and a list of games to play now but with that $1000 i could build a PC that would do the same thing that would last for a few years (the life of a console about) which would be able to play anygame at the same low qality of a console for those years so i still fail to see your point at all. My current PC is now about a year old and it still is 10x better or more then a console i DONT NEED TO UPGRADE. i want to.
  • 0 Hide
    Anonymous , February 2, 2009 11:57 AM
    Microsoft Vista is one of the key reasons the demand for new direct x10 game cards has dropped off like a cliff. If Microsoft came out with drivers for active 10x for XP it would help.
  • 0 Hide
    rooket , February 3, 2009 4:39 PM
    We aren't talking GPU sales here, we are talking Graphics Cards. GPU sales should be doing fine since the xbox360 uses an ATI chip as everyone knows and is more popular to buy than PS3 (despite that they brick quite often, my cousin has a stack of 3 under his current system because he's too lazy to ship them back to microsloth).

    Well I just bought a video card. I'll tell you what though, I haven't bought a video card since the ti4600 from nvidia (well besides a couple free after rebate 5200's at fry's) but that is because they were WAY overpriced. I mean come on, who wants to spend $600 for the cutting edge technology when you know it's going to be outdated in 6 months by a longshot? That was rediculous and I didn't like spending ~$300 on the ti4600. I had a ti4200 after that but it doesn't really count because I hawked it on ebay and got the money back while my ti4600 was being RMA'd for the second time. Thank god for lifetime warranty :) 

    I just bought a new video card for about $130 after rebate and what the heck, it is faster than those $600 video cards were. Now we have cards upwards of $400. Who needs it, the card I got is almost as fast. I'm never spending over $200 on a graphics card again. If they pull that stunt again they just will lose a customer for another 5 years.
  • -1 Hide
    konchus , February 28, 2009 5:50 PM
    wow...quarterly sales of vid cards in hundreds of millions? who the heck is buying all these vid cards?