JPR Press Release—Market Watch Q2'05

TIBURON, CA—July 27, 2005—Jon Peddie Research (JPR), a leading research and consulting firm for graphics and multimedia, today announced estimated graphics shipments and supplier market share for the second calendar quarter of 2005. Detailed second quarter results are available in the Q2'05 edition of Jon Peddie’s Market Watch, the firm’s quarterly graphics survey. Market Watch provides an in-depth look at the PC graphics market and includes unit shipment and segment market share data, trend analysis, shipment forecasts, and profiles of major suppliers.

Jon Peddie Research estimates that approximately 61.4 million PC graphics devices shipped from eight suppliers in Q2'05, a 2.0% increase over the previous quarter and a 12.9% increase over the same period the previous year. The desktop graphics segment saw quarterly growth of 2.1% with integrated desktop shipments increasing 8.4% sequentially. Discrete desktop shipments fell 6.2% on a quarterly basis. The mobile graphics segment saw quarterly growth of 1.8% with integrated mobile shipments increasing 10.3% sequentially. The strong growth in the mobile IGC segment was somewhat offset by a 12.2% sequential decline in discrete mobile shipments.

JPR estimates that approximately 14.9 million mobile graphics devices shipped in Q2'05, 10 million of which were integrated chipsets for notebooks. Mobile IGCs shipped in record numbers during the period and also claimed record share of 67.2% in the mobile graphics market, up from 62.0% share in the prior quarter and 50.0% share in the same period a year ago. ATI helped drive growth in the mobile IGC segment during the quarter with shipments of its Radeon Xpress 200M solution. With numerous design wins for this part, the company saw a 50.0% sequential increase in mobile IGC shipments during the quarter. Intel grew its mobile IGC shipments 7.4% during the quarter and remained the largest PC graphics supplier to the mobile market after surpassing ATI to claim this title in Q1’05.

JPR estimates that approximately 46.5 million desktop graphics devices shipped in Q2'05, 28 million or 60.3% of which were integrated parts. Overall, Intel claimed 40.6% of the desktop graphics market, ATI held 24.0%, and Nvidia trailed with 18.8% market share. While Intel was the largest supplier of desktop graphics during the period, ATI widened its lead over Nvidia in the desktop segment as compared to the prior quarter. In Q2'05, ATI’s desktop graphics shipments grew 6.2% sequentially while Nvidia’s desktop shipments fell 7.5%. ATI’s gains on the desktop side came entirely from its line of integrated graphics devices, shipments of which increased more than three-fold during the period. On the discrete side, ATI’s segment share remained essentially flat at 51.5% while Nvidia’s segment share fell from 46.8% to 46.1% during the period.

“Although discrete graphics suffered an expected seasonal decline in the second quarter, integrated graphics shipments were up substantially in a traditionally slow period to drive overall industry growth," said Lisa Epstein, a senior analyst at Jon Peddie Research. "The mobile IGC segment in particular showed strength that led to record shipments and share of the mobile market. This dynamic was driven both by shipments from Intel of its GMA900-based 915 IGC for mobile PCI Express platforms and by shipments from ATI of its Radeon Xpress integrated parts for AMD and Intel platforms. Such positive second quarter activity bodes well for industry performance over the balance of the year," Epstein concluded.

Intel saw a 3.5% sequential increase in graphics shipments in Q2'05, was the largest supplier of PC graphics devices worldwide, and claimed an increased share of the total graphics market. ATI remained the second largest supplier in Q2'05 with a 4.8% sequential increase in shipments and increased market share. Nvidia was the third largest supplier in Q2'05, with a 9.2% sequential decline in shipments and reduced market share. The following table lists the ranking and relative market share, based on unit shipments in Q1’05 and Q2'05, of the eight major graphics suppliers to the PC industry.

Rank	Graphics Supplier	Q1'05 Market Share	Q2'05 Market Share
1	Intel	43.1%	43.7%
2	ATI Technologies	26.1%	26.8%
3	Nvidia	17.9%	15.9%
4	VIA Technologies	6.9%	8.1%
5	Silicon Integrated Systems (SiS)	5.4%	5.0%
6	Matrox Graphics	0.3%	0.3%
7	XGI	0.2%	0.2%
8	3Dlabs (Creative Technology)	0.02%	0.02%

Pricing and Availability

The Q2'05 edition of Jon Peddie's Market Watch will be available in August 2005 in both electronic and hard copy editions. A condensed version of Market Watch, entitled First Look, is available now. The annual subscription price for Jon Peddie's Market Watch is $2,750 and includes four quarterly issues. The annual subscription price for First Look is $1,000. Full subscribers to JPR services receive Tech Watch (the company's bi-weekly report) and a copy of Market Watch as a part of their subscription. For information about purchasing Market Watch, please call 415/435-9368 or visit the Jon Peddie Research website at www.jonpeddie.com.

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, including graphics development, multimedia for professional applications and consumer electronics, high-end computing, and Internet-access product development. Jon Peddie's Market Watch and First Look are quarterly reports focused on the market activity of PC graphics controllers for mobile and desktop computing.

Press Release for Immediate Release

Jon Peddie Research: PC Graphics Shipments Up Sequentially in Second Quarter with Integrated Chipsets Driving Growth