Third Quarter PC Graphics Shipments Show ATI Loses Market Share in Every Category

Results of the acquisition? Overall market up 5% quarter-to-quarter

Robert Dow

TIBURON, CA – December 5,
Jon Peddie Research (JPR), the
leading research and consulting firm for graphics and multimedia, today
announced estimated graphics shipments and supplier market share for the third
calendar quarter of 2006. Detailed third quarter results are available in the
Q3 2006 edition of Jon Peddie’s First Look, the firm’s quarterly graphics survey. The companion Market
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 76 million PC graphics devices shipped from major suppliers
in Q3 2006, a 5.2% increase from the prior quarter and an 11.2% increase over
the same period the previous year. In the desktop graphics segment shipments
increased 2% from Q2’06 to Q3’06 and shipments grew 4.7% year-over-year.
Integrated desktop shipments dropped 3% sequentially (the second consecutive
quarter of decline
) but increased
3.3% annually. Discrete desktop shipments jumped 10.2% on a quarterly basis and
grew 6.8% year-over-year.

The mobile graphics segment saw
quarterly shipments rise a dramatic 13.8% and grow 30.2% year-over year. IGC
shipments drove growth in the mobile market in the second quarter with a
stunning 15.8% growth during the period, and discrete mobile shipments grew
7.5% during the quarter and jumped 9.3% compared to the same period the
previous year.

JPR estimates that a record 22.7
million mobile graphics devices shipped in Q3’06, 17.4 million of which were
integrated chipsets for notebooks. Mobile IGCs claimed a share of 76.8% in the
mobile graphics market, up from 75.4% in the prior quarter and up from 72.3%
in the same period a year ago. Intel led the mobile graphics market with a 51%
share (down from 54%), ATI dropped to a 24% share, and Nvidia jumped with a 8%
market share gain to 19% for the quarter.

In the discrete mobile segment,
ATI saw shipments decline dramatically on a quarterly basis while Nvidia saw
shipments increase sequentially. Nvidia grew discrete mobile segment share from
37% in Q1’06 to 53% in Q3’06. ATI’s segment share fell from 63% in Q2’06 to 47%
in Q3’06.

JPR estimates that approximately
53 million desktop graphics devices shipped in Q3’06, 31.7 million or 59.5% of
which were integrated parts. Overall, Intel held at 35% of the desktop graphics
market, ATI dropped to 22%, and Nvidia grew to 25% market share. In the
discrete desktop segment, Nvidia also grew, to 57% share, and ATI claimed 43%
share during the period.

Intel saw a flat quarter in
graphics shipments in Q3’06, but was still the largest supplier of PC graphics
devices worldwide. ATI remained the second largest supplier in Q3’06 but with a
5% sequential decline in shipments and decreased market share. Nvidia, the
third largest supplier in Q3’06, closed the gap with ATI with a 2.0% sequential
increase in shipments and increased market share. The following table lists the
ranking and relative market share, based on unit shipments in Q2’06 and Q3’06,
of the major graphics suppliers to the PC industry..


Desktop Graphics

Q2’06 Market

Q3’06 Market






ATI Technologies








VIA Technologies




Silicon Integrated Systems (SiS)