New numbers from Mercury Research, a market research company, that are planned to release on Wednesday, show that ATI Technologies has surpassed NVIDIA Corp. in terms of market share for the first time in about five years after the company’s sales skyrocketed during the third quarter of the calendar year.
An industry source has sent X-bit labs the numbers that are presumably planned to be released by Mercury Research on
ATI Grabs the Top Spot on the Graphics Chips Market
According to the data, Intel Corp.’s market share in the graphics systems market rose 1% to 39% in the Q3 2004. ATI Technologies’ market share skyrocketed 4% to 27% in the Q3 2004, while its arch-rival’s – NVIDIA Corp.’s – share dropped 8% to 15% from 23% in the third quarter of the year. Intel supplies chipsets that contain integrated graphics cores for mobile and desktop computers, while ATI and NVIDIA concentrate on standalone graphics chips for desktops and laptops.
For the first time for a long time Markham, Ontario-based ATI Technologies managed to leave NVIDIA behind in terms of market share in desktop standalone market segment. Currently ATI commands 55% of the market, up 17% from the previous quarter. NVIDIA supplied 42% of graphics chips for desktops during the Q3 2004, down 16% from the previous quarter.
ATI Technologies also took the lead over NVIDIA in the market of standalone graphics components, which includes both mobile and desktop graphics processing units. The firm supplied 59% of all graphics chips, while Santa Clara, California-based NVIDIA commanded 37% of the market, down 13% from the Q2 2004.
The success of ATI Technologies can be attributed to more affordable RADEON 9800- and RADEON 9600-series graphics cards hitting the market. While NVIDIA’s current GeForce 6-series GPUs offer customers blistering performance and feature-set and is more than just competitive to ATI’s RADEON X-series, the company’s previous generation product family GeForce FX, which generates the majority of revenue for the GPU designer, cannot offer enough performance in a number of modern games, unlike ATI’s 9800- and 9600-series products. With games like FarCry, Doom III and Half-Life 2 available today or shipping this year, both graphics chip designers managed to increase their revenues as a result of higher consumer activity.
Graphics Chip Companies Show Solid Financial Results
Even though Intel Corp. sells the majority of graphics systems available on the market and commands larger part of the market than ATI or NVIDIA, two world’s leading graphics companies manage to increase their revenues little by little as a result of PC market growth.
ATI recently reported revenues of $572.2 million for the fourth quarter of fiscal 2004 (ended
NVIDIA Corp. also recently announced that it expected to report total revenue for the third quarter of fiscal 2005 to be between $510 million to $515 million, as compared to the previous range of $470 million to $502 million. Third quarter gross margin percentage is expected to be between 31.7 percent and 32.7 percent. NVIDIA will host a conference call to discuss its final financial results for the third quarter of its fiscal year 2005 and the outlook for its fourth quarter on
ATI’s stock was $17.08, market capitalization was $4.26 at press time. NVIDIA’s share cost $14.49, while the capitalization was $2.41 billion at press time.
Officials for ATI Technologies Inc., Intel Corp., NVIDIA Corp. and Mercury Research did not comment for the story. X-bit labs has plans to release more Q3 2004 graphics market numbers according to Mercury Research’s report later.