PC Graphics Shipments Increase 11% in Q3 2002; Growth Limited to Chipsets with Integrated Graphics

Jon Peddie’s Market Watch reports chipset suppliers gain Jon Peddie’s Market Watch reports chipset suppliers gain share in Q3’02 while discrete suppliers experience shipment declines

Robert Dow

TIBURON, CA, January 15, 2003—Jon Peddie Research (JPR),
a leading research and consulting firm for graphics and multimedia,
today announced the availability of the Q3’02 edition of Jon Peddie’s
Market Watch
, the firm’s quarterly graphics survey. Market
takes an in-depth look at activity in the PC graphics market
and contains unit shipment and segment market share data, trend analysis,
and two-year forecasts. The report also covers product news, design
wins, financial results, and share price performance for leading graphics

Jon Peddie Research estimates that PC graphics shipments in Q3’02
increased by approximately 10% as compared to the previous quarter.
However, growth was limited to shipments of chipsets with integrated
graphics (IGCs) for desktop platforms and was largely at the expense
of discrete graphics, total shipments of which declined by more than
4% from the previous quarter.

The trend to integrated desktop graphics in Q3’02 was led by Intel,
which launched and began to ship its 845G integrated graphics chipset
in Q2’02. Augmented by offerings from SiS and VIA, overall shipments
of IGCs quickly ramped to reach 44% of desktop graphics shipments
in Q3’02, as compared to 21% in the first quarter.

The overall growth in graphics
shipments during Q3’02 belies the fact that shipments of discrete
desktop and mobile graphics controllers and of integrated graphics
chipsets for notebooks declined as compared to the previous quarter,”
said Lisa Epstein, a senior analyst at Jon Peddie Research. “Although
suppliers such as Intel, SiS, and VIA saw revenue growth in Q3’02
from sales of IGCs for desktop PCs, the ongoing weakness in demand
for PCs has encouraged aggressive pricing and most suppliers experienced
reduced ASPs, margins, and profits in Q3’02 as a result,” Epstein

ATI, SiS, and VIA reported narrower gross margin in Q3’02 as compared
to Q2’02 and ATI, Nvidia, SiS, and Trident all reported a loss in

In Q3’02, the relative market share of graphics suppliers shifted
significantly with Intel surpassing ATI in overall unit shipments
to become the second largest graphics supplier worldwide. Nvidia remained
the largest graphics supplier but with a reduced share of the total
graphics market. The relative share of the total market for major
suppliers over the past two quarters is shown in the following charts.

Total graphics market share in Q2’02
and Q3’02