Jon Peddie Research (JPR), graphics and multimedia market research firm, today announced a new study that indicates the end of the market for chipsets with integrated graphics cores. According to JPR, by 2012 such core-logic sets will be replaced by microprocessors with built-in graphics engines.

In 2008 67% of the graphics adapters shipped were built into chipsets. In 2011 it will drop to 20%, and by 2013 it will be less than one percent, according to the study.

For a period of time, between 2010 and 2012 there will be three choices for graphics available: traditional discrete graphics processing units mounted on add-in boards and/or the motherboard, integrated graphics processor (IGP) chipsets, and processors with embedded graphics. One or more of these devices will be employed in PCs.

Inevitably, market shares will shift as suppliers of IGPs like AMD, Intel, Nvidia, SiS, and Via Technologies find the opportunities for chipsets diminishing and they will seek to develop new products that take advantage of their specific strengths.

“We can already see significant maneuvering between Intel and Nvidia as Nvidia strengthens its high end offerings with CUDA development tools and on the mobile side, the company has introduced the Tegra platform which relies on an ARM processor and Nvidia graphics. AMD is going head to head with Intel with Fusion, an embedded graphics CPU, but it too is building out its workstation and visualization graphics. Via and its S3 graphics subsidiary is playing its cards close to the chest but they are currently attempting to challenge Intel on price in key strategic markets such as netbooks,” the study reads.

The first integrated graphics controller (IGP) was Sun Microsystems' LEGOS which came out in 1989 for its SPARC processor. The first integrated graphics controller for the PC was introduced by Silicon Integrated Systems – SiS – for Intel processors in 1997.

The first graphics processor inside central processing units will be Intel's Westmere in Q4 2009, AMD will introduce their Fusion processor in Q2 2011, and both companies will employ 32nm process to make such chips.

“However, this will not, as many believe, impact the discrete graphics and add-in board market. In fact, with hybrid configuration, embedded graphics will enhance the discrete GPU sales,” claims Jon Peddie Research.

Tags: AMD, ATI, , Intel, Nvidia, SiS, Via Technologies, S3 Graphics, JPR