Unit sales of the best graphics cards for desktops — dedicated models, not integrated options — have been growing steadily for about two years now, but every rally comes to its end. Shipments of discrete GPUs hit a two year low in the second quarter, and dollar sales of add-in-boards (AIBs) dropped by a whopping $3.1 billion, according to Jon Peddie Research.
Partners of AMD, Intel, and Nvidia sold 10.37 million discrete graphics cards for desktop PCs in Q2 2022, according to data from JPR. Perhaps more importantly, dollar sales of standalone GPUs for desktops dropped to $5.5 billion, down 36% from $8.6 billion in Q1 2022 primarily due to lower average selling prices (ASPs) that dropped due to inventory corrections and the downturn in cryptocurrency mining that occurred in the channel. Pour one out for the "poor" GPU companies...
As ASPs (average sale prices) on graphics cards are now considerably lower than they were just several months ago, it might be a good time to get one of those current-generation graphics cards, but with GeForce RTX 40-series and Radeon RX 7000-series right around the corner, it might make sense to wait a bit longer.
Typically, unit sales of discrete graphics cards for desktops in Q2 are lower than those in Q1, but a 22.6% decline in just one quarter is a considerably more significant drop than we normally observe.
Shipments of Nvidia GeForce graphics cards decreased by a substantial 18.5% in Q2 when compared to Q1, whereas unit shipments of AMD Radeon boards dropped by a rather whopping 35.5% in the second quarter, according JPR.
As a result, despite a rather massive decrease in unit and dollar sales in Q2, Nvidia managed to recapture some market share from its rival and now commands approximately 79.6% of the market. AMD controlled around 20% and Intel ended up with less than 1% as it only just started to sell its standalone Arc A380 GPUs in more or less notable quantities.
As AMD and Nvidia are poised to introduce their new RDNA 3 and Ada Lovelace client GPU architectures in the coming months, partners of both companies have a lot of current-generation inventory left. When coupled with supply chain and geopolitical issues, turmoil in the market of graphics cards is set to continue, JPR says.
"The continued intermittent disruptions in the supply chain due to China's zero COVID policy, combined with an escalating trade war between China and the Western world, is aggravating the introduction of new parts," said Jon Peddie, president of JPR. "In one sense, that is a blessing in disguise, as the AIB and GPU suppliers got caught with an inventory overhang due to a relaxation from work-at-home demand and the crash of crypto mining due to an algorithm change. As result, it doesn't look like we will see any stability in supply and demand until the end of Q1 2023."
Jon Peddie Research remains optimistic about the market of discrete graphics cards for desktops in the long term. To some degree, Intel’s entering the market of discrete GPUs will increase unit sales of standalone graphics processors in general and desktop AIBs in particular. JPR believes that this increase will start to materialize already in 2023 and the total available market of graphics cards for desktops will increase to $44 billion by 2026, up from $39.9 billion in the last four quarters