The graphing cards market is experiencing an unprecedented downturn, with a 13% decline in sales compared to the previous quarter, and a 40% decline compared to the same time last year. According to a report from Jon Peddie Research (JPR), only 6.3 million graphics cards were shipped in the last quarter, a significant drop from the over 13 million shipped in the fourth quarter of 2021, when the GPU shortage was at its peak.
While the number of graphics cards being shipped may be down, the attach rate, which is the number of graphics cards actually used in PCs, has seen a slight increase of 8% compared to the previous quarter. This suggests that people are still building and using PCs, but they are opting for older, last-gen graphics cards rather than the latest and greatest.
JPR notes that this is likely due to the global PC market slowdown caused by inflation worries and layoffs, as well as suppliers trying to reduce inventory levels by discounting last-gen boards. Additionally, the report notes that this time of year is typically slow for graphics card sales, and the disappointing performance of the RTX 4060 Ti may also have contributed to the downturn.
Despite the decline in overall graphics card sales, AMD has seen its market share decline to 12%, down from 24% last year, while Nvidia has seen its market share grow to 84%, up from 75% last year. Intel’s Arc A770 and A750 graphics cards have managed to claw away 4% of the market, a significant increase from the 2% they held last year.
Graphics Cards Experience Unprecedented Downturn Despite Rise in Attach Rate
Nvidia has had to reduce its GPU shipments more than AMD, with a decline of over 15%, while AMD’s cards are down just under 8%. However, JPR notes that this does not necessarily mean that Nvidia is selling more graphics cards, as it may be experiencing inventory management issues as it works through selling off its old RTX 30-series inventory.
Despite the current downturn, JPR is predicting that the graphics card market will return to growth in the second half of the year. The report’s author, Robert Dow, notes that the first quarter of 2023 saw the aftermath of the pandemic-era supply chain inconsistencies and orders, but that the second half of 2023 promises to be brighter.
The graphics card market is experiencing a rare downturn, with a decline in sales and a shift in market share. While this may be a challenging time for graphics card manufacturers, JPR is predicting a return to growth in the second half of the year.
