Graphics card sales fall off a cliff – but there are good reasons why

Graphics card sales are in a major slump, at least going by the latest figures from an analyst firm which keeps regular track of the GPU world.

The headline stats for Q3 2022 from Jon Peddie Research (JPR) make for pretty miserable viewing, with sales of both integrated (on processors) and discrete (standalone) GPUs falling to 75.5 million units. That’s down a towering 25.1% compared to the same quarter in the previous year (and it’s a slump of 10.5% when stacked up against the previous quarter of this year, Q2 2022).

Desktop graphics card shipments dropped by 15.4% year-on-year, and the picture was worse with laptop GPUs falling by 30%, to make for the “biggest drop since the 2009 recession” as JPR observes. So, this is the worst slump in 13 years, in other words – nasty indeed.

Breaking things down to individual GPU makers and overall market share, AMD was worst hit with its share of 20% of the market in Q2 2022 falling to 12% in Q3, which is an alarming drop.

Nvidia also lost ground falling from an 18% share to 16%, and Intel made the gains here, with its market share rising 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 CPUs widely used on notebooks (and sporting integrated graphics). We don’t get a market share breakdown for discrete desktop GPUs, but that’s where Nvidia invariably leads by a long, long way.

Analysis: Gathering strength of headwinds

This is a bit of a shocker at first glance, and the precipitous decline plus that headline figure of the worst slump in well over a decade will have raised some eyebrows this morning. The third quarter is usually a strong suit, with back-to-school sales, and the Holiday season coming into view, after all.

However, are these stats really all that surprising when you think about it, though? We don’t believe so, and let’s chew over the main reasons why.

First off, the crypto crash which came into force earlier this year has meant a weakening of demand from the likes of miners buying GPUs. Furthermore, during Q3 of this year, we also saw a lot of chatter about next-gen graphics cards – with some gamers no doubt deciding that now is not the right time to buy, when a much better GPU is going to be just round the corner.

Granted, we’ve only seen very expensive RTX 4000 series graphics cards from Nvidia so far, and soon from AMD we’ll get nearly as pricey RX 7000 models, but that won’t have stopped a good amount of folks thinking that more affordable GPUs from the next-gen ranks aren’t too far off – or that RTX 3000 or RX 6000 prices are going to fall further, for that matter, which they still are doing.

A further element coming into play here must surely be the cost-of-living crisis and worries over rampant inflation, certainly in countries like the US and UK. Money is getting much tighter, and so there’s less disposable income to spend on upgrading pricey graphics cards or buying new PCs or laptops. And while GPU prices are still falling as noted, they’re hardly reasonable yet – with those new next-gen graphics cards doing nothing to remedy that situation.

There are a lot of headwinds to contend with, in short, though JPR is tentatively optimistic about the next quarter. While Q4 shipments are still likely to be down, or that’s the general industry sentiment, average selling prices will be up (and that makes sense with those expensive new Lovelace and RDNA 3 models), and JPR concludes that “supply will be fine [for Q4], and everyone will have a happy holiday.”

We’re thinking the picture might just be a little rockier than this, but time will tell.

Via Tom’s Hardware

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