GPU Market Grows Depite Recession

Graphics processors shipments increased in the third quarter of 2008 by the biggest margin in six years, defying expectations in light of a presumed global recession according to industry analyst Dr. Jon Peddie, of Jon Peddie Research.

“The third quarter is seasonally up as OEMs place orders for chips to build inventory for the holiday season,” said Peddie. “However, this quarter was up more than any other for some time, and in spite of suggestions of a recession that started last Q4.”

Peddie reports that one third of all new PCs being shipped today utilize more than one GPU, a fact that contributed total GPU shipments in Q3 2008 of more than 111 million units. During the same quarter last year, according to Peddie, the industry produced only 91 million GPUs.

Although Intel is the only one of the big three that doesn’t currently offer a dual-GPU solution, the chip giant remains the dominant player in the market, commanding a 49.4 percent share of the combined (desktop and notebook) market—that’s more than next two competitors (AMD and Nvidia) combined. Intel recorded an astonishing year-over-year growth rate of 81.4 percent, according to Peddie, while AMD grew by 22.8 percent.

Although Nvidia’s output shrank by 6.4 percent, the company still managed to cling to second place, with a 27.8 percent share of the market compared to AMD’s 20.6 percent market share. The remaining 2.2 percent of the market is divided between Matrox, SiS, and VIA/S3, all three of which experienced negative year-over-year growth.

Shipments of notebook GPUs soared by nearly 40 percent between Q3 2007 and Q3 2008, according to Peddie’s analysis, with the fabs churning out 49.4 million units, a number that accounts for 44.4 percent of the entire GPU market. Here again, Intel rules the roost, owning 53.9 percent of the market compared to second-place Nvidia’s 26.2 percent share and AMD’s 18.3 percent share. It does appear, however, that Nvidia’s notebook GPU problems have cost it market share: Peddie’s analysis indicates that the company has lost 4.4 percent of the market year-over-year, while Intel’s share grew by 2.3 percent and AMD’s grew by 2.6 percent.

Peddie does not expect the party to continue, since neither AMD nor Nvidia are expected to release any more new GPUs this year. The two companies introduced a tremendous amount of new product in the previous three quarters and have been beating each other over the head on pricing in the past few months. Likewise, he reports, Intel and AMD have also stabilized on their integrated graphics offerings. Peddie predicts that the fourth quarter of 2008, which typically sounds the year’s crescendo, could well be flat when compared to the third quarter.