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Graphics chip sales soar, prices fall

And carry on falling

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Graphics processor shipments jumped 5.2 per cent between Q4 01 and Q1 02, but average selling prices are falling and the outlook for Q2 is described as 'mixed'.

Says who? Says Jon Peddie Research in its most recent round-up of the graphics chip market. Nvidia's profit warning this week shows that 'mixed' is translating into 'bloody awful'.

It points out that the PC market consumes 30 per cent more GPUs than CPUs - "30% of the computers that ship have two graphics devices for every x86-based processor, according to the report.

This is helping the smaller suppliers stay in the market. Consolidation has seen the number of graphics chip suppliers fall to just eight, accounting for 99 per cent of the market. But only two, ATI and Nvidia, command significant market share.

"The rest survive on the over-buy of the industry, spot availability, aggressive pricing, and niche positioning," Lisa Epstein, JPR analyst, comments.

JPR estimates that graphic chip shipments to the PC industry in Q1 were 40.7m units, 2.3 per cent up on Q1, 2001 (38.78m) and 5.2 per cent up on Q4'01 (38.78m)

The notebook sector soaked up 19 percent of total graphics chipments in Q1, up from 14 per cent in Q1'01, and 17 per cent in Q4'01. JPR notes that integrated graphics are "penetrating the mobile segment as suppliers increasingly target the consumer market and strive to bring down notebook ASPs".

Desktop controllers accounted for 81 per cent of the graphics devices shipped into the PC industry in Q1'02, equivalent to 33.06m units. ®

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