Graphics card sales are in a big slump, at least following the latest numbers from an analytics firm that regularly tracks the world of GPUs.
The headline statistics for the third quarter of 2022 from Jon Peddie Research (opens in new tab) (JPR) provide a pretty miserable preview, with sales of both integrated (in processors) and discrete (standalone) GPUs falling to 75.5 million units. This represents a 25.1% drop compared to the same quarter a year ago (and is a 10.5% drop when compared to the prior quarter of this year, Q2 2022).
Desktop graphics card shipments were down 15.4% year-on-year, and the picture worsened with laptop GPUs down 30%, representing the “biggest drop since the 2009 recession,” as JPR notes. So this is the worst drop in 13 years, in other words – really nasty.
Breaking things down to individual GPU manufacturers and overall market share, AMD has been hit the hardest with its 20% market share in Q2 2022 dropping to 12% in Q3, which is an alarming drop.
Nvidia also lost ground falling from an 18% share to 16%, and Intel gained here, with its market share rising from 62% to 72%.
Remember, this is for all GPUs, desktop and laptop, discrete and integrated, which is why Intel does so well with its widely used notebook CPUs (and sports integrated graphics). We don’t have a market share breakdown for discrete desktop GPUs, but that’s where Nvidia invariably leads the way by a long, long way.
Analysis: Regaining strength from headwinds
That’s a bit of a shock at first glance, and the precipitous decline plus the headline figure for the worst drop in over a decade will have raised a few eyebrows this morning. The third quarter is often a strong point, with back-to-school sales and the holiday season upon us after all.
However, are these statistics really that amazing when you think about it? We believe not, and we are going to chew on the main reasons.
Firstly, the cryptocurrency slump that took effect earlier this year meant a weakening of demand from miners buying GPUs. What’s more, during Q3 of this year, we’ve also seen a lot of talk about high-end graphics cards – with some gamers no doubt deciding that now isn’t the right time to buy, when a much better GPU will be around the corner.
Granted, we’ve only seen very expensive RTX 4000 series graphics cards from Nvidia so far, and soon from AMD we’ll have nearly as expensive RX 7000 models, but that won’t have stopped a fair amount of people thinking that more affordable next-gen GPUs generation are not far off – either the prices of the RTX 3000 or RX 6000 will fall further, by the way, which they are still doing.
Another element that comes into play here must surely be the cost of living crisis and concerns about rampant inflation, certainly in countries like the US and the UK. Money is getting a lot tighter and so there is less disposable income to spend on upgrading expensive graphics cards or buying new PCs or laptops. And while GPU prices are still falling as noted, they’re still unreasonable – with these new high-end graphics cards doing nothing to remedy this situation.
All in all, there are plenty of headwinds to contend with, although JPR is tentatively bullish on the coming quarter. While fourth-quarter shipments are still expected to decline, or that’s the general industry sentiment, average selling prices will rise (and that makes sense with the expensive new Lovelace and RDNA 3 models), and JPR concludes that “supply it will be good [for Q4]and everyone will have a happy holiday.”
We’re thinking the picture might be a little tougher than that, but time will tell.
Through Tom’s hardware (opens in new tab)