Shipments of Graphics Adapters Increase Amid PC Sales Slowdown - JPR

From X-bit Labs: Even though sales of personal computers were below expectations in the first quarter this year, shipments of various graphics adapters were up both sequentially and annually, according to estimates by Jon Peddie Research, a market tracking and consulting firm. The analysts believe that system makers and channel resellers acquired too much inventory in Q1, which will negatively impact results of suppliers in Q2.

Over 125 million graphics chips and central processing units with graphics shipped in Q1 2011. Intel was the leader in unit shipments for the quarter, elevated by Intel Core i-series "Clarksdale" and "Arrandale", latest generations of Atom chips for netbooks as well as the latest Core i-series "Sandy Bridge" microprocessors. Year to year this quarter AMD/ATI had tremendous market share growth, Intel had above average growth, and Nvidia slipped significantly.

Around 83 million PCs shipped worldwide in Q1’11, a drop of 5.4% compared to Q4 2010, (based on an average of reports various market trackers), which should have naturally negatively impacted sales of various graphics adapters (including discrete and integrated solutions for desktops and notebooks). Nevertheless, the Q1 2011 change in total shipments from last quarter increased 10.3%, significantly above the ten-year average of -4% raising concerns about an inventory buildup that will have to run down in Q2, according to JPR.

Graphics processing units (GPUs) and chips with graphics (chipsets, microprocessors) are the leading indicator of the PC market. At least one, and often two GPUs are present in every PC shipped. It can take a form of a discrete chip, integrated in the chipset or embedded in the CPU. The average has grown from 115% in 2001 to almost 145% GPUs per PC.

It is unclear why sales of graphics adapters - both standalone and integrated - were growing rapidly amid dropping sales of PCs.

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