May 2006

A pop in the sales of graphics add-in board sales will occur in Q4 and Q1 due to Intel, not Microsoft

Key Implications

More people in the CPU, GPU, IGP, and PC market in general have been expecting Microsoft’s Vista to create a rise, a bubble, in add-in board (AIB) sales. Microsoft’s decision to postpone Vista until next year has dashed those hopes. But Intel will be helping the AIB and GPU suppliers with its new introductions.

Analysis

Intel, stung by the success of AMD in the high-performance computing and entertainment sectors of the consumer and scientific PC markets, plans to take the crown back. It’s a two-step plan, and the roll-out will be unveiled in Taiwan in June at the Computex conference.

Intel has recently introduced a new high-performance chipset, the 975X. This chipset has no integrated graphics and provides extremely high-speed management of the PC’s memory—the most critical part of gaining better performance and one of the critical areas in which Intel has lagged AMD.

In early tests using the 975X with today’s CPUs, Intel demonstrated (in private discussions) performance improvements from 10% to as high as 20% depending on the application. Some of those applications were demanding games.

When Intel releases Conroe in early Q3, the combination of the 975X chipset and Conroe will produce a stunningly powerful system, and Intel expects it to give AMD’s wildly successful FX-60 a run for the money.

However, to get all that performance, especially in games a high performance (read $$$) AIB with lost of memory will be needed.

When word gets out about that improved performance it will carry over to the introduction of Vista and the GPU and AIB suppliers could enjoy several quarters of vigorous sales. Gray box