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Despite of financial crisis, total available market of graphics adapters increased dramatically in the third quarter of 2008. The demand towards graphics cores increased across the board and it cannot be said that a particular category was substantially more successful than the rest.

“The third quarter is seasonally up as OEMs place orders for chips to build inventory for the holiday season. However, this quarter was up more than any other for some time, and in spite of suggestions of a recession that started last Q4. Desktops increased seasonally and notebooks enjoyed quite significant gains,” said Jon Peddie, president of Jon Peddie Research.

According to figures released by JPR, in Q3 2008 over 111 million graphics adapters (both standalone and integrated) were shipped. During the same quarter last year, only 91 million graphics products were shipped, and 94 million units shipped in Q2 2008, which means that shipments of graphics cores increased 22.5% year over year and 17.8% quarter-to-quarter, an unbelievable boost in general and especially noteworthy considering the current market conditions.


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ATI, graphics product group of Advanced Micro Devices, was the biggest winner in Q3 2008 thanks to successful launch of ATI Radeon HD 4000-series products. The company managed to boost its shipments by 33.8% and increase its market share to 20.6%. Intel Corp. also managed to boost shipments of its chipsets with integrated graphics processors (IGPs) by 23%. Nvidia Corp. did not manage to increase its sales inline with market trends and only reported 4.4% increase in shipments during the quarter as well as market share decline to 27.8%. Also, despite of positive market conditions, Silicon Integrated Systems reported 28.9% decrease in IGP shipments in Q3, whereas Via Technologies/S3 Graphics succeeded in increasing its graphics products sales by 2.1%.

Intel increased its first place position on the desktop market to 43.9% share while Nvidia’s position slipped to 32.6% and ATI climbed up to 20.3%. Desktop graphics adapters saw an increase of 4.7% this quarter to 61.9 million units, shares of integrated and discrete graphics cores were not disclosed.

In the notebook graphics adapter market Intel’s shipments dropped one point to 56.2% while Nvidia GPU shipments declined to 21.8%, whereas ATI/AMD jumped to 20.9%. Notebook chips soared almost by 40% quarter-to-quarter to 49.4 million units, to claim 44.4% of the market.

Mr. Peddie noted that Q4 2008 should be an interesting quarter as ATI and Nvidia are not expected to release any more new GPUs given the large number of introductions in the last three quarters, and Intel and AMD have stabilized on their integrated offerings.

It should be kept in mind that the lack of new product introductions forces developers of graphics chips to cut prices rather aggressively so to sustain market shares. In mid-November, 2008, Intel plans to release its Core i7 chips aimed at performance demanding users and gamers. Since such product launches usually catalyze some customers to upgrade their systems, shipments of higher-end graphics cards may increase in Q4.

Although there was amazing growth in Q3 this year, the gloom and doom scenarios are having their effect on business and consumer spending plans, according to the analyst and while Q4 is usually the crescendo of the year, it could well be flat (compared to Q3) this year.

Tags: ATI, AMD, Nvidia, Geforce, Radeon, , Intel

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