Computer graphics chip shipments decline in Q4

Faltering desktop market has knock-on effect on GPUs

Graphics chips are especially important in the PC industry

Estimates from Jon Peddie Research (JPR) published today indicate that computer graphics chip shipments saw a significant 34 per cent decrease in the fourth quarter of 2008 when compared to the third quarter.

Graphics chips, or GPUs, are used in a range of systems, but are especially important in the PC industry where one in three computers shipped today contains more than one GPU.

JPR reported that total shipments of GPUs in the fourth quarter of 2008 reached 72.35 million, down from 100.5 million in the same quarter last year. Shipments were also down 34 per cent from the 111.26 million units in the third quarter of 2008, the first time since 2000 that fourth-quarter shipments have decreased compared to the third quarter.

Although the entire market saw reduced shipments, some firms struggled more while others, such as Nvidia, managed to claw back some market share from AMD.

The fall in GPU shipments comes as the desktop market continues to shrink. The rate of decline accelerated at the end of 2008, but it is hoped that the desktop market will level off in 2009 as companies take advantage of more attractive prices to buy more powerful desktop machines.

Some 37.45 million GPUs were shipped for the desktop segment in the fourth quarter, a 39.5 per cent drop from the previous quarter, while 34.89 million units shipped for the notebook segment.

JPR explained that there are more desktop graphics devices shipping than notebook ones because desktops are more likely to have more than one graphics board. Overall, notebook GPU shipments were down 29 per cent in the fourth quarter compared to the third quarter.

Dr Jon Peddie, president of JPR, noted that, while the fourth quarter is usually a positive one for the computer industry, there have "obviously been some inventory problems in the quarter as sales failed to live up to the optimistic expectations of the third quarter of 2008".

Dr Peddie added that, despite vendors bracing for a slower than usual quarter owing to the faltering economy, "performance this quarter was surprisingly low" .

"We are forecasting a strong third and fourth quarter for 2009 and bracing for what will probably be the worst first and second quarter decline we have seen since the internet bubble of 2000," he concluded.