Jon Peddie’s newest report on the state of the graphics card market has arrived and while the news is not good it is nowhere near as bad as it could have been. The graphics card market had a very large hurdle to deal with over these last few quarters which is why the total market declining 0.8% from last quarter and a 3.38% decline from Q1 2011 is not terrible news. The impact came from the flooding in Thailand, which has been causing lowered sales for most of the PC market this year. With hard drives being in such short supply the number of systems that could be built by vendors dropped dramatically, those systems which were built were noticeably more expensive than before the flood as the price of hard drives doubled in some cases. With less systems being built and sold there was less demand for GPUs from the vendors, thankfully the industry has recovered from the shortage and we are seeing prices and supplies returning to their normal levels.
When you break it down by company, only AMD saw growth from last quarter, though at a 0.3% increase it was not so much growth as simply holding their ground. NVIDIA has stopped reporting on their IGP sales which, believe it or not, still sell in Asia and so saw a drop of 4.5% from last quarter. Some of that decline will be due to the change in reporting but the lack of Kepler stock has certainly hurt their sales as well. Intel saw a decline of 1.3% from the previous quarter again likely due to the influence of the hard drive shortage reducing the number of systems which were sold.
When you look at only discrete cards, the sales increased 2.7 % from the last quarter but were down 11% from this time last year, thanks to the GPU now present on both AMD and Intel processors. With Llano and Trinity as well as SandyBridge and Ivy Bridge we saw the arrival of onboard graphics which provided enough horsepower that many casual users no longer need a discrete GPU. Previous generations of IGPs and onboard graphics cores struggled to play HD video without stuttering and they were essentially useless if they were called upon to power even casual games. The new generations of processors can not only handle HD video but are quite capable of light gaming duties. They also made possible tablets and extremely small laptops, aka Sleekbooks and Ultrabooks, which provided good enough performance for many users and these small form factors have little space for discrete GPUs. As both AMD and Intel’s processors have a graphics core they count towards the total graphics card market share which is good news for them but not for NVIDIA who count on add in card sales exclusively. On the plus side, when you examine add in card sales for laptops alone, NVIDIA actually saw a gain of 5%.