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Jon Peddie Research: big swings continue in the market for graphics add-in boards (AIBs)

Posted: 11.26.07

TIBURON, CA—November 26, 2007 —What a difference a couple of quarters can make in the dynamic market for graphics add-in boards (AIBs). Q1'07 was downright ugly, not so much with respect to units but very much so in the context of revenue and ASPs. Volume was down just modestly, but ASPs and revenue (street) were way down, off 21.2% sequentially and a huge 39.8% year-to-year. Q2'07 showed an expected bounce back to respectability, with a modest year-over-year (YoY) increase in both units and market value.

But in this dynamic market, there's not much in the way of status quo. Q1 saw that big swing down, and then Q2'07 saw moderation. Now Jon Peddie Research's (JPR) Q3 results are in, and the firm reports another big swing, but this time a strong – and most welcome – swing to the upside.

Capitalizing on the momentum that ramped in Q2, with both Nvidia and AMD in various stages of product transitions to new graphics technologies, Q3 saw units increase an impressive 18.7% (YoY). But revenue was the real bright spot, increasing 33.0%.

Desktop AIB Market Value Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07

Units

19.70
21.69
21.06
20.58
21.07
25.74

Growth - sequential

-11.3%
10.6%
-2.9%
-2.2%
2.3%
22.2%

Growth - year-to-year

7.4%
7.7%
-5.7%
-7.4%
6.9%
18.7%

Market value ($M)

$5,205.26
$4,975.92
$4,497.25
$3,543.75
$5,758.26
$6,617.23

Growth - sequential

-11.5%
-4.4%
-9.6%
-21.2%
62.5%
14.9%

Growth - year-to-year

-13.9%
-15.1%
-39.8%
10.6%
33.0%

Table 1 AIB market value history, by quarter

Revenue outpacing units contradicts the typical trend we tend see in semiconductor-driven markets, where as products mature, ASPs moderate or drop, thereby driving up volume. But in the inverse case of Q3, JPR credits the larger gains in revenue to a volume shift up toward more lucrative price bands, as Nvidia in particular saw more demand for its latest generation of high-end Performance, Enthusiast and Workstation class product.