Mobile Down, Desktop Up
X-bit labs: Traditionally, Q3 2010 is very good for graphics cards, but this year the market was down. What were the reasons for that?
Matt Skynner: I think one of the reasons from the notebook point of view is that notebook GPUs peaked in Q2. So, it has been a bit of inventory correction that happened in the third quarter. Our notebook GPU numbers are still pretty good. If you look at them, you will find out that it is the second highest number of mobile GPUs we have ever shipped. In Q2 we shipped the most mobile GPUs we have shipped ever. So, it was a bit of correction in the third quarter from an inventory point of view that impacted most Nvidia and not us.
AMD's shipments and market share numbers for mobile GPUs are not just good, they are excellent. According to Mercury Research, AMD shipped 9.28 million of standalone GPUs for notebooks in the third quarter of 2010 (down 15% from Q2) and grabbed 61.90% of the market. By contrast, sales of mobile GPUs by Nvidia Corp. dropped by 32.7% and it only supplied 5.7 million of mobile GPUs.
X-bit labs: Shipments of your integrated chipsets dropped more significantly than shipments of standalone ATI Radeon graphics processors (this is more or less correct to both desktop and mobile families). Did you see certain customers with integrated graphics switching to discrete GPUs? Or you started to ship for certain new designs with discrete GPUs, which helped to offset dropping demand for discrete chips?
Matt Skynner: The number of design slots has not changed from Q2 to Q3. The other thing is that, particularly for desktops, Mercury Research and Jon Peddie Research report sell-in numbers. It also depends where in the [supply] chain are those GPUs. Actual graphics cards based on those chips may come later.
X-bit labs: Were Intel Corp.'s Core i3/i5 processors with embedded graphics a threat for your shipments in Q3 2010?
Matt Skynner: Threat in Q3? No!
X-bit labs: Shipments of mobile GPUs were down, whereas desktop processors enjoyed growth. Is it deferred demand that was caused by product shortages, or there are certain interesting trends going on on the market?
Matt Skynner: Shipments of all types of desktops products went up. The channel is more seasonally affected than the OEMs. Generally, Q3 is a bigger market than Q2 for the channel. We have had very good demand for our Radeon HD 5700-series and 5800-series, we could not supply all of that. [So there is deferred demand], but I am not sure all of the growth is that. [...] Our share went touch-down in desktops. Perhaps, Nvidia gained some share with the GeForce GTX 460, but we have just launched the Radeon HD 6800-series and I think we are in a better position and I believe we are gaining share.
Indeed, Nvidia gained desktop market share as it served gamers with rather advanced GeForce GTX 460-series products. And while with the model 460 AMD's graphics unit dropped the ball in Q3 (without significant ramifications, based on Mercury Research's numbers), in the fourth quarter the company returned with the Radeon HD 6800-series, which is pretty competitive.