JPR: PC Graphics Shipments Up Sequentially in Q2 with Integrated Chipsets Driving Growth

TIBURON, CA—July 27, 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 the second calendar quarter of 2005. Detailed second quarter results
are available in the Q2’05 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 61.4 million PC graphics
devices shipped from eight suppliers in Q2’05, a 2.0% increase over
the previous quarter and a 12.9% increase over the same period the previous
year. The desktop graphics segment saw quarterly growth of 2.1% with
integrated desktop shipments increasing 8.4% sequentially. Discrete
desktop shipments fell 6.2% on a quarterly basis. The mobile graphics
segment saw quarterly growth of 1.8% with integrated mobile shipments
increasing 10.3% sequentially. The strong growth in the mobile IGC segment
was somewhat offset by a 12.2% sequential decline in discrete mobile
shipments.

JPR estimates that approximately 14.9 million mobile graphics devices
shipped in Q2’05, 10 million of which were integrated chipsets for notebooks.
Mobile IGCs shipped in record numbers during the period and also claimed
record share of 67.2% in the mobile graphics market, up from 62.0% share
in the prior quarter and 50.0% share in the same period a year ago.
ATI helped drive growth in the mobile IGC segment during the quarter
with shipments of its Radeon Xpress 200M solution. With numerous design
wins for this part, the company saw a 50.0% sequential increase in mobile
IGC shipments during the quarter. Intel grew its mobile IGC shipments
7.4% during the quarter and remained the largest PC graphics supplier
to the mobile market after surpassing ATI to claim this title in Q1’05.

JPR estimates that approximately 46.5 million desktop graphics devices
shipped in Q2’05, 28 million or 60.3% of which were integrated parts.
Overall, Intel claimed 40.6% of the desktop graphics market, ATI held
24.0%, and Nvidia trailed with 18.8% market share. While Intel was the
largest supplier of desktop graphics during the period, ATI widened
its lead over Nvidia in the desktop segment as compared to the prior
quarter. In Q2’05, ATI’s desktop graphics shipments grew 6.2%
sequentially while Nvidia’s desktop shipments fell 7.5%. ATI’s
gains on the desktop side came entirely from its line of integrated
graphics devices, shipments of which increased more than three-fold
during the period. On the discrete side, ATI’s segment share remained
essentially flat at 51.5% while Nvidia’s segment share fell from
46.8% to 46.1% during the period.

“Although discrete graphics suffered
an expected seasonal decline in the second quarter, integrated graphics
shipments were up substantially in a traditionally slow period to drive
overall industry growth,” said Lisa Epstein, a senior analyst at
Jon Peddie Research. “The mobile IGC segment in particular showed
strength that led to record shipments and share of the mobile market.
This dynamic was driven both by shipments from Intel of its GMA900-based
915 IGC for mobile PCI Express platforms and by shipments from ATI of
its Radeon Xpress integrated parts for AMD and Intel platforms. Such
positive second quarter activity bodes well for industry performance
over the balance of the year,” Epstein concluded.

Intel saw a 3.5% sequential increase in graphics shipments in Q2’05,
was the largest supplier of PC graphics devices worldwide, and claimed
an increased share of the total graphics market. ATI remained the second
largest supplier in Q2’05 with a 4.8% sequential increase in shipments
and increased market share. Nvidia was the third largest supplier in
Q2’05, with a 9.2% sequential decline in shipments and reduced market
share. The following table lists the ranking and relative market share,
based on unit shipments in Q1’05 and Q2’05, of the eight major
graphics suppliers to the PC industry.