Graphics card sales are falling off a cliff, but there are good reasons for it

Graphics card sales are falling off a cliff, but there are good reasons for it

Graphics card sales have fallen sharply, at least according to the latest figures from an analyst firm that regularly tracks developments in the world of GPUs.

Key Q2022 75,5 statistics from Jon Peddie Research(opens in a new tab) (JPR) give a pretty paltry display, with integrated (in-processor) and discrete (standalone) GPU sales falling to 25,1 million Of units. That's an impressive 10,5% drop from the same quarter last year (and a 2022% drop from the previous quarter of this year, QXNUMX XNUMX).

Desktop graphics card shipments fell 15,4% year-over-year, made worse by a 30% drop in laptop GPUs, resulting in the "biggest drop since the 2009 recession" , as JPR notes. So this is the worst crisis in 13 years, in other words, really nasty.

Breaking things down between individual GPU manufacturers and overall market share, AMD was hit the hardest with its 20% market share in Q2022 12 falling to an alarming drop of XNUMX% in QXNUMX.

Nvidia also lost ground, falling from 18% share to 16%, and Intel made a profit here, with its market share falling from 62% to 72%.

Remember, this is for all GPUs, both desktop and laptop, discrete and integrated, which is why Intel does so well with its processors widely used in laptops (and sports laptops with integrated graphics). We don't get a market share breakdown for discrete desktop GPUs, but that's where Nvidia invariably leads by far.

Analysis: gathering strength from headwinds

It's a bit of a shock at first glance, and the precipitous drop and the worst number of crises in over a decade will have caught the attention of some this morning. The third quarter is usually a high point, after all, with back-to-school sales and the holiday season approaching.

However, are these statistics really that amazing when you think about it? We don't think so, and we look at the main reasons.

First, the cryptocurrency crash that took effect earlier this year led to weaker demand from miners buying GPUs. In addition, during the third quarter of this year, there was also a lot of talk about next-generation graphics cards, and some gamers no doubt decided that now is not the right time to buy, while a much better GPU will be around the corner. corner. corner.

Granted, so far we've only seen very expensive RTX 4000-series graphics cards from Nvidia, and soon from AMD we'll have almost as expensive RX 7000 models, but that won't have stopped a lot of people from thinking that the more affordable GPUs in the next-gen aren't too far away, or that the prices of the RTX 3000 or RX 6000 will drop even further, which always happens.

Another element coming into play here must surely be the cost of living crisis and concerns about runaway inflation, certainly in countries like the US and the UK. Money is getting tighter, so there is less disposable income to spend on upgrading expensive graphics cards or buying new PCs or laptops. And while GPU prices continue to drop as indicated, they're still unreasonable as these new next-gen graphics cards do nothing to remedy that situation.

In short, there are plenty of headwinds to contend with, although JPR is tentatively optimistic for the next quarter. While Q3 shipments are likely to continue to decline, or so is the general industry sentiment, average selling prices will rise (and that makes sense with those pricey new Lovelace and RDNA XNUMX models), and JPR concludes that "the offer will be fine." and everyone will have a great party.

We think the picture could be a bit more complicated than that, but time will tell.

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Via Tom's Hardware(Opens in a new tab)