Graphics Chip Shipments Plummet In 4QGraphics Chip Shipments Plummet In 4Q

Global shipments of graphics processors plummeted in the fourth quarter of last year and the industry should brace for the worst declines in the first half of this year since 2000, a market research firm said Thursday.

Shipments of the chips that power graphics in PCs, as well as medical systems, point-of-sale terminals, kiosks, and digital signs, fell by 28% in the quarter to 72.35 million units, compared with 100.5 million units during the same period a year ago, Jon Peddie Research said. Compared with the third quarter, shipments fell 35%, which was the first quarter-to-quarter drop in the fourth quarter in eight years.

All the major manufacturers felt the pain of the market slump, brought on by dismal sales in the PC industry. VIA Technologies suffered the most with a nearly 72% year-to-year drop, while Intel shipments fell the least at nearly 21%.

Year-to-year declines of the other leading vendors, rounding to the nearest percentage, were Advanced Micro Devices, 24%; Nvidia, 34%; Matrox, 46%; and SiS, 61%.

A major contributor to the drop in the GPU market was the nearly 40% fall in shipments for desktop PCs, the research firm said. Even though shipments of laptops have surpassed desktops, more GPUs are sold for the latter because desktops are more likely to have more than one graphics board.

While AMD, Intel, and Nvidia saw slight increases in shipments for notebooks, the overall market was down 29% in comparison to the third quarter.

GPU sales in the fourth quarter were "surprisingly low," even though vendors had prepared for a slower-than-usual period.

"Put simply, the market stalled in the fourth quarter," Jon Peddie, president of the research firm, said in a statement. "Due to the worldwide financial market meltdown, the U.S. housing market meltdown, layoffs, and media reports, the consumer has hunkered down to wait out the storm."

And indicators point to little relief in the first half of this year. “We’re forecasting a strong Q3 and Q4 for 2009 and bracing for what will probably be the worst Q1 and Q2 decline we’ve seen since the Internet bubble burst of 2000," Peddie said.