Jon Peddie Research: Discrete Stalls, Notebooks Surge

Intel leads in all graphics shipments followed by ATI and Nvidia

Robert Dow

TIBURON, CA—December 18, 2004—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 third calendar quarter of 2004. Detailed third-quarter
results are available in the Q3’04 edition of Jon Peddie’s Market
, 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 63.19 million graphics devices
shipped for all segments of the personal computer industry in the
third quarter of 2004. This represents a 16.2% increase from 54.38
million units shipped in Q2’04 and a 13.0% increase from 55.91 million
units shipped in the same period the previous year.

On the desktop, the trend to IGCs continues unabated. Shipments of
graphics chips grew in all segments; however, the discrete segment
continues to show weakness. Discrete shipments for desktops declined
19.2% in the third quarter, and discrete desktop shipments only grew
2.3%. Integrated Graphics Chipsets (IGCs), on the other hand, grew
25.1% during the third quarter of 2004.

The mobile segment continues to outshine the industry as a whole.
In Q3’04 graphics shipments to the mobile market hit new records.
Discrete Mobile shipments grew 13.3% compared to Q2’04, and mobile
IGC shipments grew 25.8% during the period. Overall, mobile graphics
shipments increased 19.5% in Q3’04 and mobile graphics held a 20%
share of the total graphics market.

The AIB segment has been most impacted by the rise of IGCs. AIBs
are down to 30% of the total market.

The dominance of IGCs has made Intel the top supplier of graphics
devices to the computer market. However, there is room for other suppliers
as indicated by an increase in shipments for all suppliers of integrated
graphics including the leaders Intel, SiS, and VIA and smaller IGC
suppliers ATI and Nvidia.

Nvidia has lost market share in Q3’04, ceding the second-place spot
to ATI. Nvidia leads in performance parts, while ATI leads in PCI
Express unit shipments.

“Overall, the graphics industry saw fairly typical performance
in Q3’04 with good sequential and year-over-year growth,” said
Lisa Epstein, Senior Analyst at Jon Peddie Research. Epstein expects
to see continued growth for the mobile market with increasing shipments
of IGC devices for notebooks.