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AMD, Intel, Nvidia face bleak graphics market

Jon Peddie Research says Thursday that estimated graphics chip shipments took a steep dive in the fourth quarter of 2008. And it's going to get worse.

Brooke Crothers Former CNET contributor
Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.
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Brooke Crothers

Jon Peddie Research said Thursday that estimated graphics chip shipments in the fourth quarter plummeted 34 percent from the third quarter--a very atypical month-to-month decline.

AMD, Intel, Nvidia 2008 laptop graphics chip market share by quarter
AMD, Intel, Nvidia 2008 laptop graphics chip market share by quarter Jon Peddie Research

"The fourth quarter is usually a positive quarter for the computer industry. There has obviously been some inventory problems in the quarter," said Jon Peddie, president of Tiburon Calif.-based research firm, in a statement.

And it will get worse. "We're...bracing for what will probably be the worst Q1 and Q2 decline we've seen since the Internet bubble pop of 2000," he warned.

Total shipments of GPUs for the fourth quarter of 2008 were 72.35 million, down 28.5 percent from 100.5 million GPUs shipped in the same quarter last year. And in the third quarter of 2008, 111.26 million units shipped, representing a 34 percent sequential quarter-to-quarter drop. (GPU stands for graphics processing unit.)

"Vendors were bracing for a slower than usual quarter due to economic factors, but performance this quarter was surprisingly low," Peddie said. He attributed it to the usual suspects: the worldwide financial market decline and sapped consumer spending.

In the desktop segment, Nvidia has held a slight edge with a market share of 37.9 percent, gaining on Intel, Peddie said. AMD also gained market share on the desktop, going from 20.3 percent in the third quarter to 21.4 percent in the fourth quarter. "Given the tough circumstances of this quarter, AMD's increase is no mean accomplishment," Peddie said.