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The demand towards graphics cards in the channel is stabilizing, which should result in unit sales increase in the third quarter of 2010, an analyst said in a note to clients. The improving market climate has already played in favour of Nvidia Corp., one of two suppliers of discrete graphics processing units (GPUs).

The demand for graphics cards in the channel market in Europe and China has stabilized and is now more predictable than back in mid-summer, according to analyst Michael McConnell with Pacific Crest Securities. Tier-one graphics card  makers now expect Q3 2010 unit sales to be up 10% sequentially from Q2 2010, reports Barron's web-site.

As a result of stabilized demand and Nvidia's conservative chip order practices since the end of July, checks find that channel inventory for Nvidia products has dropped to three to four weeks, a decrease from ten to twelve weeks last quarter. Low inventory levels allows the company to more dynamically react onto changing market conditions. Consequently, the analyst believes that Nvidia will perform in-line with its guidance for 3% to 5% sequential increase of revenue.

Earlier this year as a result of weaker than expected demand for PCs in Europe and China, high DRAM prices and other factors a number of companies reported lower than expected revenues.  Intel Corp. has even reportedly massively slashed prices on select chips in order to boost its Q3 sales.

Neither of the aforementioned companies commented on the news-stories.

Tags: Nvidia, ATI, AMD, , Intel

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