PC Market Consumes 30% More GPUs than CPUs – and Prices Continue to Decline, says JPR

Industry saw growth in graphics in Q1 as shipments increased 5.2% from Q4’01 to Q1’02. Outlook mixed for Q2

Robert Dow

TIBURON, Calif. — August 1, 2002 According
to Jon Peddie Research (JPR), graphics out ship CPUs while prices
within the PC market continue to be pressured downward. Findings
from JPR’s Market Watch report indicate 30% of the computers
that ship have two graphics devices for every x86-based processor.
This, the report points out, has helped to keep the smaller suppliers
in the market.

“The maturation of the PC industry and the saturation of the
desktop market has lead to increased consolidation amongst PC graphics
suppliers,” confirmed Lisa Epstein, senior analyst of JPR’s
Market Watch report. “Today there are just eight suppliers
and only two with significant market share. The rest survive on
the over-buy of the industry, spot availability, aggressive pricing,
and niche positioning.”

On the notebook side, mobile display controllers accounted for 19%
of total graphics shipments in Q1’02, up from 17% in Q4’01 and from
14% in Q1’01. Most major suppliers now participate in the mobile
segment, recognizing its potential for growth. Likewise, chipsets
with integrated graphics are penetrating the mobile segment as suppliers
increasingly target the consumer market and strive to bring down
notebook ASPs.

Jon Peddie Research estimates that 40.79 million graphics devices
shipped for all segments of the personal computer industry in the
first quarter of 2002. This represents a 5.2% increase from 38.78
million units shipped in Q4’01 and a 2.3% increase from 39.89 million
units shipped in the same period the previous year.

Of the graphics devices shipped in Q1’02, 33.06 million or 81% were
desktop controllers and 7.73 million or 19% were mobile display
controllers. Eight suppliers accounted for 99% of all graphics shipments
during the quarter.

Overall, the industry saw good growth in shipments for Q1’02 as
compared to the declines of the prior year. The outlook for Q2’02
is mixed, however, as the industry enters a traditional seasonal
slowdown, and suppliers such as AMD, Apple, Intel, HP and IBM have
all issued revised guidance in the face of unexpected shortfalls
going forward.