The GPU maker’s shipping volumes are down a whopping 28 percent from a year ago. This would be probably OK if the rest of the industry was taking a canning, like it was last year. However the PC market is pretty much business as usual so the drop in shipments is bad news for Nvidia.
It is nothing to do with sluggish GPU sales either. The figures show that Intel and AMD are both up at Nvidia’s expense, with AMD posting 15.4 percent growth in GPU shipments and Intel posting 9.4 percent growth.
It is probably multiple factors. Mostly there is the combination of in-package or on-die GPUs from Intel and AMD which are competing against Nvidia’s offerings. However discrete GPU’s from AMD appear to be unaffected, neither is Nvidia’s own discrete GPU line.
This year Nvidia suffered from its bus licensing dispute with Intel, which prohibited the company from making chipsets with integrated GPUs for Intel’s CPUs and effectively was cut from the growing market. This has hurt Nvidia’s integrated GPU business and will probably get worse as things progress.
Matters will get worse as the integrated GPUs get even better. Sandy Bridge has taken out the lower end of the discrete GPU market and Ivy Bridge is expected to do the same thing to the mid-range. AMD’s Llano should have three times the performance of Intel’s Sandy Bridge which will muddy the waters further.
To deal with this Nvidia will have to rely on ARM mobile products and Tesla until Project Denver arrives. Then Nvidia will have to compete head-to-head with Intel.
If ARM mobiles and Tesla markets were not growing so well, Nvidia would be toast right now. As it is, JPR expects that for the next year or so it is going to have a rough time of it. In short, it is in doo doo but if it hangs in there it might just survive.