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The most-recent study from leading market tracking company Mercury Research shows that the market share gap between leading graphics processors suppliers ATI Technologies and NVIDIA Corp. is closing, as the latter gains share across all segments, while the former loses parts of the markets it controls. Still, both firms as well as market leader Intel Corp. enjoy shipments growth.

Notebooks and Discrete Graphics Chips Grow, Intel Leads

During the Q4 2004 notebook graphics shipments were growing faster than desktop graphics shipments in both discrete and integrated segments. However, growth in standalone components – such as ATI RADEON and NVIDIA GeForce – for desktops was 13% quarter-over-quarter, which allowed both ATI and NVIDIA to enjoy high demand for their products.

Without surprises Intel Corp. maintained its leadership position in the graphics market in the fourth quarter of 2004. ATI Technologies managed to stay flat with the previous quarter on the level of 27%, while NVIDIA Corp. managed to increase its share by 3 points to 18%. Other providers, namely S3 Graphics, XGI Technologies, Matrox, etc., stayed relatively flat with the previous quarters. Overall market share reflects companies’ success in various market segments, including discrete and integrated graphics solutions for desktops and notebooks.

In desktop discrete market ATI Technologies slipped 4 points to 51% from 55% in Q3 2004. NVIDIA, in contrast, managed to increase the market share towards mid-forties, noticeably up from the previous quarter.

NVIDIA’s Notebook Presence Increases

Last quarter NVIDIA’s presence in the notebook space increased slightly, the Santa Clara, California-based graphics company commanded nearly 25% of the market. ATI’s share slipped vaguely to 69%. Furthermore, ATI’s share dipped to 19% in the notebook integrated segment, down 7% sequentially, whereas Intel Corp. succeeded in expanding its presence and now commands 72% of that market, up 11 points.

While Intel Corp. can continue to aggressively win notebook integrated market share, ATI Technologies is likely to ship more discrete components for notebooks, as it has recently announced 50 design wins with various notebook makers, in case it does not have issues with low-k manufacturing technology at TSMC.

NVIDIA Corp. also said it plans to increase its presence in notebook discrete graphics market.

Full market share report that covers various graphics market areas can be acquired from Mercury Research.

Low-K Problems for ATI?

NVIDIA design wins are conditioned by raising share of the GeForce 6-series products among the company’s product lineups. During the Q4 2004 the company initiated volume shipments of its PCI Express x16 graphics processing units, including such popular products as the GeForce 6600-series.

ATI’s market share slips are likely to be a result of ATI’s partial inability to ship enough products made using low-k manufacturing process: during the most-recent conference call ATI’s top managers said the company faced certain volume restrictions with 0.13 micron low-k fabrication process. Additionally, the company experienced certain issues with availability of some other products in different market segments. In the coming quarter ATI is projected to be ramping up its production using 0.11 micron process technology.

Intel Corp. may continue to improve its positioning in the notebook integrated segment, as its recently announced i915-series chipsets for Intel Centrino laptops offer virtually the same capabilities as ATI’s and NVIDIA’s mobile VPUs.

Anna Filatova, Editor in Chief for X-bit labs, contributed to the news-story.


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