JPR: Mobile and Integrated PC Graphics Show Strong Growth in 2004, Desktop Shipments Slower Year-ove

TIBURON, CA—March 8, 2005—Jon Peddie Research (JPR), a leading research and consulting
firm for graphics and multimedia, today announced estimated graphics
shipments and supplier market share for 2004. Detailed year-end results
are available in the Q4’04 edition of Jon Peddie’s Market Watch, the firm’s quarterly graphics survey. Market Watch
provides an in-depth look at the PC graphics market and includes unit
shipment and segment market share data, trend analysis, shipment forecasts,
and profiles of major suppliers.

Jon Peddie Research estimates that approximately 239 million PC graphics
devices shipped from eight suppliers in 2004, a 10.1% increase over
2003. Desktop graphics shipments grew a modest 6.9% year-over-year while
mobile graphics shipments climbed 25.2% during the period.

Shipments of integrated graphics outpaced those of discrete controllers
in 2004, with IGCs claiming 56.1% of the total graphics market during
the year. This represents a year-over-year gain of more than three points
in share for integrated graphics, which held 52.9% of the total market
in 2003. Mobile graphics held 20.2% share of the graphics market relative
to desktop devices in 2004, up from 17.8% in 2003. Growth in the mobile
segment was a bright spot for the industry in 2004 with similar positive
performance expected in the coming year.

Intel was the world’s leading supplier of PC graphics in 2004, claiming
37.5% of the total market, up from 31.3% in 2003. ATI was the second
largest supplier to the market in 2004, with 25.6% share, up from 22.2%
in the prior year. Nvidia followed with 21.0% share, down sharply from
27.2% in 2003.

Intel’s share of the graphics market comes entirely through shipments
of integrated devices for its desktop and notebook processors. The company
led the desktop graphics segment in 2004 with 38.3% of the market, up
from 34.3% in 2003. Intel was second only to ATI in graphics shipments
to the mobile segment during the year. ATI claimed 47.6% of the mobile
graphics market in 2004, down from 56.8% in 2003, while Intel held 34.4%
of the segment, up from 17.7% in 2003.

Intel grew its graphics shipment and market share in 2004 with the
new 915G integrated desktop controller, which features support for PCI
Express and DirectX 9 features. Growth also came from shipments of mobile
integrated controllers for the Centrino platform including the 855GM
and 855GME. In addition, Intel continued in 2004 to ship existing integrated
products such as the mainstream 865G and value-class 845G desktop chipsets.

>ATI was the leading supplier
of discrete graphics devices in 2004, with 51.5% of the market, up from
40.2% in 2003. Nvidia held 46.3% of the discrete market during the period,
down from 54.1% in 2003. Shipments from ATI and Nvidia together accounted
for 97.8% of the discrete graphics market in 2004, up from 94.3% in
the prior year. Consolidation has reshaped the graphics industry in
the recent years, and smaller suppliers such as 3Dlabs and Matrox no
longer command significant share of the discrete graphics market.

Intel was the leading supplier of integrated graphics devices in 2004
by a wide margin. The company held 66.9% of the IGC market during the
period, up from 59.2% in 2003. VIA was the second largest supplier to
the IGC segment with 15.4% share, followed by SiS, which held 11.2%
share. ATI and Nvidia claimed the balance of the IGC market in 2004,
but each with relatively small share in comparison to the three leading
suppliers.

The following table lists the ranking and relative market share, based
on unit shipments in 2003 and 2004, of the major graphics suppliers
to the PC industry.