In my opinion, graphics chips are without doubt one of the most powerful, exciting, and essential components in tech today: not only does every computer require one (or more), but the technology is entering into major new markets like supercomputers, remote workstations, and simulators almost on a daily basis. New technologies and compute programs are taking advantage of the ability of GPU power to scale. On top of that, PC gaming momentum continues to build. It would be no exaggeration to say that GPUs are becoming the 800-pound gorilla in the room.
In our latest Market Watch report, available now, the big drop in graphics shipments in Q1 has been partially offset by a small rise this quarter. Shipments were up 3.2% quarter-to-quarter, and down 4.5% compared to the same quarter last year.
Here are some of the highlights of the report:
- AMD’s overall unit shipments increased 11% quarter-to-quarter, Intel’s total shipments increased 4% from last quarter, and Nvidia’s decreased 8.3%.
- The attach rate of GPUs (includes integrated and discrete GPUs) to PCs, for the quarter was 139% (up 3.2%) and 32% of PCs had discrete GPUs, (down 3.6%) which mean 68% of the PCs are using the embedded graphics in the CPU.
- The overall PC market increased 1.3% quarter-to-quarter, and decreased 1.7% year-to-year.
- Desktop graphics add-in boards (AIBs) that use discrete GPUs declined 17.5%.
- Q2 is, on average, usually mixed, up slightly some years, down others. There was an abnormal spike in 2009 after the massive market decline which warps the 10-year average to 7.1% and makes the 3.2% this year appear to be below average. If the anomalous 2009 spike is ignored, the 9-year average is just 0.5%, which would make the 3.2% increase for Q2 2014 a significant increase.
GPUs are traditionally a leading indicator of the market, since a GPU goes into every system before it is shipped, and most of the PC vendors are guiding cautiously up to flat for Q3’14.
The Gaming PC segment, where higher-end GPUs are used, was a bright spot in the market in Q1. Nvidia and AMD high-end GPUs sales were strong, lifting the ASPs for the discrete GPU market.
Q2 2014 saw the first decline in tablet sales, and one of the few increases in PC sales. The CAGR for total PC graphics from 2014 to 2017 is basically flat. We expect the total shipments of graphics chips in 2017 to be 418 million units. In 2013, 438.3 million GPUs were shipped and the forecast for 2014 is 414.2 million.