Apr 28, 2009 (02:04 PM EDT)
Graphic Chip Sales Brighten PC Market Outlook

Read the Original Article at InformationWeek

Shipments of graphics processors in the first quarter were higher than the end of last year, an indication that PC makers and other industries are starting to replenish inventories, a research firm said Tuesday.

The 3.3% uptick from the fourth quarter of 2008 was the first time in eight years that the first quarter broke the season trend of lower shipments, Jon Peddie Research said. On a year-to-year comparison, the news was not as good. Unit shipments in the first quarter fell 21.1% from the same period in 2008.

Nevertheless, the quarter-to-quarter boost is an indication that industries that use graphics processors are buying again as a result of depleted inventories, Peddie said. Companies, such as PC makers and manufacturers of aerospace, automotive, and medical systems, had pretty much stopped ordering GPUs in the third and fourth quarters of last year.

The big winners in the PC market were Intel and Nvidia, which saw quarter-to-quarter growth of 7.5% and 4.8%, respectively. Advanced Micro Devices saw shipments fall by 8.5%. Year to year, the three major vendors were all in the negative numbers. AMD shipments fell by 27.5%; Intel, 8.2%; and Nvidia, 25%.

Peddie expects the sales of graphics chips to PC makers to return to normal seasonal trends in the third quarter of this year. However, shipment levels aren't expected to return to 2008 levels until 2010, because of the economic recession.

Driving higher sales of GPUs for PCs include new designs from AMD's ATI unit and Nvidia, the need for system manufacturers to boost inventories for back-to-school and holiday sales, and new operating systems hitting the market: Apple's Snow Leopard and Microsoft's Windows 7, Peddie said.

Another sign that the PC market may be starting to recover from the economic downturn is in the latest shipment numbers from IDC. Overall, the market in the first quarter fell 7.1% from a year ago, which was less than the analyst firm had expected. IDC had projected an 8.2% decline and said it expects year-to-year growth to return toward the end of the year.


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