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The chairman of Pine Technology, the company better known for its XFX-branded graphics cards, Michael Chiu, said he expects many changes in the market of add-in graphics cards in the following years due to new market trends as well as some other reasons. The executive, however, declined to note effects for the market.

Graphics adapters have lost over half of the market share during the last decade after Intel Corp. and other major developers of chipsets introduced core-logic sets with built-in graphics cores due to the fact that mainstream customers hardly have need for high-performance 3D graphics, something, which is required for 3D games. In several years time Advanced Micro Devices promises to integrate graphics processor into general-purpose x86 chips, which will make it even harder for add-in boards to compete.

Moreover, the trend towards desktop replacement with notebooks, which started roughly seven years ago in some countries, affects sales of desktops: already now the pace of market growth for laptops is higher than that of desktops. While desktops still have larger market share than notebooks, the gradual expansion of mobile computers means that fewer desktop graphics cards are sold, while standalone graphics adapters in notebooks are pretty rare.

Finally, new-generation game consoles – such as Microsoft Xbox 360 and Sony PlayStation 3 – today not only have similar DirectX 9 and OpenGL 2.0 graphics capabilities with widespread DirectX 9.0 graphics cards, but also can output graphics with up to 1920x1080 resolution with progressive scan, something never before available on game consoles. Crystal clear graphics full of cinematographic effects and the lack of any need to update drivers or games may catalyze some of PC gamers to migrate to consoles.

According to Mr. Michael Chiu, these three factors may change the landscape of add-in graphics cards market in the next several years.

“We see that notebooks will quickly replace desktops, and Intel is gearing up its efforts to develop its IGP [integrated graphics processors] chipsets. Another thing that deserves attention is the growing popularity of game consoles. These three factors may have a strong impact on the graphics card market in the next two to three years,” Mr. Chiu said in an interview with DigiTimes web-site.

For producers of add-in graphics cards there will be hard times if all the trends mentioned above fully materialize. The market of add-in graphics modules for notebooks, such as MXM, is very small and will hardly grow significantly in terms of volume, whereas game consoles feature graphics cores that cannot be upgraded. While the market of standalone graphics cards will certainly remain in the place, it is highly likely to get much smaller and some companies may exit it.

Pine Technology currently has over 1500 employees, with 320 of them working at marketing and R&D positions. The remaining 1200 work at our manufacturing bases. Mr. Chiu said that his company currently ships 450 thousand graphics cards per month, and its revenues for fiscal 2006 totaled $354 million.

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