Graphics chips (GPUs and IGPs) are the leading indicator of the PC market. The GPUs go into a system before it becomes a PC and gets into the hands of the customer.
After the channel stopped ordering GPUs and depleted inventory in anticipation of a long drawn out worldwide recession in Q3 and Q4 of 2008, expectations were hopeful, if not high that Q1’09 would change for the better. In fact, Q1 showed improvement but it was less than expected, or hoped. Instead, Q2 was a very good quarter for vendors – counter to normal seasonality – but then these are hardly normal times. It’s clear the channel is gearing up for what it thinks is going to be a robust back-to-school season.
Traditionally, Q1 to Q2 sales decline due to summer vacations and preparation for the fall. This year preparation seems to have gotten off to an early start.
| 8 yr avg. | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | |||||||||
|
Average change
Q1 to Q2 |
0.83% | -5.42% | -5.18% | 1.63% | -4.22% | 3.13% | -0.49% | 31.29% | ||||||||
|
Table 1: Growth rates from Q1 to Q2 from 2003 to 2009 |
||||||||||||||||
TOTAL MARKET
Year to year things were great. Shipments jumped up to 98.3 million units, up 31.3% from last quarter -- and most everyone fared well.
| Vendor |
This
|
Market
|
Last
|
Market
|
Growth
|
A year
|
||||||
| AMD | 18.13 | 18.4% | 12.81 | 17.1% | 41.5% | 17.11 | ||||||
| Intel | 50.30 | 51.2% | 37.20 | 49.7% | 35.2% | 44.67 | ||||||
| Nvidia | 28.74 | 29.2% | 23.26 | 31.1% | 23.6% | 29.63 | ||||||
| Matrox | 0.06 | 0.1% | 0.07 | 0.1% | -6.2% | 0.10 | ||||||
| SiS | 0.40 | 0.4% | 0.70 | 0.9% | -42.9% | 1.90 | ||||||
| VIA/S3 | 0.67 | 0.7% | 0.84 | 1.1% | -19.5% | 1.00 | ||||||
| Total | 98.30 | 100.0% | 74.87 | 100.0% | 31.3% | 94.42 | ||||||
|
Table 2: Total Graphics Chip Market for Q2'09 |
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Things probably aren't going to get back to the normal seasonality 'till Q3 or Q4 this year, and we won't hit the levels of 2008 until 2010. However, people still need to buy things. Old computers will fail, new employees will be hired and need machines, and of course software upgrades like Windows 7 will be coming along.
We are still predicting an upturn in the PC market in Q3 and Q4 and in particular for the graphics market (which serves not just PCs but aerospace and automotive, industrial systems, medical systems, kiosks and POS). We are optimistic because these are seasonally the best quarters.
- In Q4 there will be two new operating systems: Apple's Snow Leopard, and Windows 7 which will help stimulate new purchases in the holiday season
- ATI & Nvidia will be introducing new 40nm designs with higher performance, GPU-compute, and surprisingly aggressive prices.
- The worst is over for inventories run down and the channel is now restocking for back-to-school, and the holiday madness.
- And yes, there is pent up demand.
- We still believe there will be an impact from the stimulus programs worldwide
We're just finalizing our Q2'09 Market Watch report and will have all the details on this quarter (and every other one back to Q1'04) for our subscribers first thing tomorrow.
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About Jon Peddie Research
Dr. Jon Peddie has been active in the graphics and multimedia fields for more than 30 years. Jon Peddie Research is a technically oriented multimedia and graphics research and consulting firm. Based in Tiburon, California, JPR provides consulting, research, and other specialized services to technology companies in a variety of fields including graphics development, multimedia for professional applications and consumer electronics, high-end computing, and Internet-access product development. Jon Peddie's Market Watch is a quarterly report focused on the market activity of PC graphics controllers for notebook and desktop computing.
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