Overreliance on just-in-time deliveries complicates the volatile graphics processor sector.
The supply network for graphics processors continued its rollercoaster ride during the third quarter as persistent supply disruptions messed with what an industry analyst concludes was overreliance on just-in-time inventory management.
Jon Peddie Research reported this week that GPU shipments destined for PCs declined a surprising 18.2 percent sequentially from the previous quarter despite a 12 percent rise on an annual basis. Market leader Nvidia recorded a healthy 8-percent jump in quarterly GPU shipments at the expense of rivals AMD (down 11.4 percent) and Intel (minus 25.6 percent).
“Covid continues to unbalance the fragile supply chain that relied too heavily upon a just-in-time strategy,” said Jon Peddie. “We don’t expect to see a stabilized supply chain until the end of 2022. In the meantime, there will be some surprises.”
Peddie noted that the third quarter is traditionally the strongest for graphics vendors prepping for the holiday shopping season. For now, at least, market seasonality is a thing of the past as chip vendors adjust their guidance upward for the next quarter by an average of 2.7 percent.
As with most products these days, average selling prices are high as chip supplies remain tight. Peddie Research said the low end of the tablet market is currently saturated with Google Chromebooks, creating an unexpected inventory buildup.
Noting that the graphics sector is a bellwether for technology markets, Peddie said most chip vendors are adjusting their quarterly guidance up by an average 3 percentage points. That reflects a combination of what’s left of normal seasonality mixed with the pandemic-driven supply chain hangover.
The overall GPU attach rate, that includes integrated and discrete devices along with notebooks, desktop PCs and workstations, jumped 125 percent. That’s a 7.6-percent increase from the previous quarter as PC demand continued to outstrip supply. Still, the PC CPU sector declined 23.1 percent in what should have been a strong third quarter. For example, tablet shipments fell 6.9 percent on a quarterly basis.
Despite concerted efforts to grab market share from Nvidia, AMD has managed only single-digit increases in GPU market share over the past over the past three quarters, Peddie reported.
This article was originally published on EE Times.
George Leopold has written about science and technology from Washington, D.C., since 1986. Besides EE Times, Leopold’s work has appeared in The New York Times, New Scientist, and other publications. He resides in Reston, Va.