Up is down, down is up in the graphics processor market. The pandemic keeps upending expectations...
Graphics processor (GPU) demand offers a graphic example of how difficult technology market forecasting has become during a pandemic.
Case in point: Demand for graphics processors would normally be expected to benefit from back-to-school notebook sales. In the pre-Covid days, those sales would have shown up during the third quarter. GPU market analyst Jon Peddie reports this week that school-related sales appear to have been pulled in to the second quarter as desktop purchases declined.
The graphics market analyst also reported a surprise 2.5 percent sequential increase in PC GPU shipments during the second quarter, with year-on-year shipments up 11.2 percent.
GPU leader Nvidia recorded the biggest jump in PC graphics processor demand, up 17.8 percent in the second quarter. AMD’s quarterly shipments rose 8.4 percent while Intel’s declined 2.7 percent, reflecting recent manufacturing woes that have slowed it desktop sales.
While Intel still controls nearly two-thirds of the desktop GPU market, Nvidia and AMD thoroughly dominate the discrete GPU sector. Peddie reports that Nvidia’s share of the discrete graphics processor market jumped 5 point in the second quarter to 80 percent, likely fueled by applications ranging from gaming to AI inferencing.
Nvidia also is benefitting from increase demand for desktop graphics add-in boards that use discrete GPUs. Shipments of graphics cards jumped 6.55 percent in the second quarter.
From these unexpected quarterly results, Peddie concludes the pandemic is distorting global GPU market in ways few could have anticipated. Graphics processors, he notes, “are traditionally a leading indicator of the market since a GPU goes into every system before suppliers’ ship a PC.” With most semiconductor vendors raising their third-quarter guidance by an average of 12 percent, Peddie adds that “some of that guidance is based on normal seasonality, but there is also a factor for the coronavirus impact.”
For the foreseeable future, work-from-home orders, virtual schooling and a boom in graphics-heavy gaming are likely to offset record unemployment. Therefore, Peddie and other tech analysts continue to gauge consumer sentiment as economies seek to reopen after a wave of retrenchment.
Overall, Peddie concludes, the GPU market, like other chip sectors, is experiencing a “very unusual year.”
As the saying goes, the only certainty these days is continued uncertainty. But what does seem likely is the pandemic will persist, and the notion of “normal seasonality” in market forecasting is a thing of the pre-coronavirus past.