Graphics chip shipments driven by netbooks, Windows 7

IDG News Service - Shipments of graphics chips worldwide went up in 2009 and could rise again this year as the PC industry emerges from the recession and consumers open up wallets, Jon Peddie Research said in a study on Tuesday.

Graphics chip shipments totaled 425.4 million units in 2009, a growth of 14% compared to the previous year, according to the study. Shipments could rise by 27.9% to 544 million units this year.

Consumers held off from purchasing technology products including graphics chips during the recession, but are now feeling good about buying, said Jon Peddie, president of Jon Peddie Research. The adoption of low-cost netbooks with integrated graphics cards and PCs with the Windows 7 OS contributed to the growth for graphics cards, Peddie said.

"We had a very deep recession; it cut sales off for a long time and now the market is just recovering," Peddie said. Increased spending by consumers could continue to help graphics chip shipments grow through the year, he said.

Intel in particular registered strong growth during 2009, finishing as the top graphics vendor during the fourth quarter. Intel held a market share of 55.2% in the fourth quarter, which grew from the 47.7 market share it held during the previous year's fourth quarter. Intel's graphics chip shipments grew by 114.7% year over year.

Nvidia, on the other hand, conceded market share to Intel during the fourth quarter. Nvidia was in second place, with a 24.3% market share, compared to a 25.3% market share it held in the previous year's fourth quarter. Advanced Micro Devices was third, holding a 19.9% market share, a slight gain from the 19.3% market share it held at the end of 2008.

Intel's graphics chip shipments went up, with increased sales of Atom chips for netbooks and strong growth in the desktop segment. AMD gained share in the integrated laptop graphics segment, but lost ground in the discrete graphics card segment due to supply issues. Nvidia's share went up in discrete graphics cards for desktops, but it lost share in the chipset graphics segment.

The fourth quarter also marked the first time a chip maker integrated a graphics processor inside the CPU. Intel in December released the Pine Trail platform for netbooks, which embeds a graphics processor inside the CPU. Until now, graphics chips resided outside the CPU on chipsets, but more chip makers are putting graphics chips inside CPUs.

Intel started shipping laptop and desktop chips that combine a graphics chip and CPU in a chip package. AMD will soon start sampling Fusion, a CPU that integrates a graphics chip.