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."

Marcus Yam
Marcus Yam served as Tom's Hardware News Director during 2008-2014. He entered tech media in the late 90s and fondly remembers the days when an overclocked Celeron 300A and Voodoo2 SLI comprised a gaming rig with the ultimate street cred.
  • 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.
  • xsamitt
    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.
  • Tindytim
    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.
  • tmc
    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.
  • tayb
    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.
  • enforcer22
    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.
  • jawshoeaw
    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?
  • nekatreven
    BlessedmanPeople expect better then what they are delivering, Simple answer.
    ^ +1 That, and a lot of people are just broke.