It's Intel's fifth consecutive quarter of producing CPUs with GPUs integrated into the same package (if not on the same die), and, predictably, the shift has not been kind to NVIDIA. The latest numbers from JPR show the increasing bind that NVIDIA is in, with the GPU maker's shipping volumes down a whopping 28 percent from a year ago. Mind you, the rest of the PC market has largely returned to some semblance of normalcy, so this drop in shipments is not good for NVIDIA.
Meanwhile, 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.
The quarter-over-quarter story tells much the same story, but less starkly. NVIDIA is down 1.7 percent from last quarter, while Intel is up 14.2 percent and AMD is up 13.3 percent.
In all, it looks like a combination of in-package or on-die GPUs from Intel and AMD, and NVIDIA's bus licensing dispute with Intel, which prohibited the company from making chipsets with integrated GPUs for Intel's CPUs, has taken its toll on the GPU maker. Right now, the pain is isolated to NVIDIA's integrated graphics processor business, a business that dropped sharply this past quarter and that NVIDIA itself admits will continue to decline. But soon, the pain will begin to spread up through NVIDIA's still-strong discrete GPU business.
The simple fact is that, with performance from integrated GPUs rising at a rapid pace, the discrete GPU market is about to start shrinking right out from under NVIDIA. Intel's upcoming Ivy Bridge platform will feature an on-die GPU that begins to threaten the mid-range of the discrete market the way that Sandy Bridge threatens the bottom end; and the on-die GPU with AMD's Llano is rumored to be some three times the performance of Intel's Sandy Bridge.
So with its bread-and-butter discrete GPU poised for slow and steady cannibalization by integrated GPUs, NVIDIA will increasingly rely on a combination of ARM mobile products and HPC-oriented coprocessors (i.e., Tesla) to see it through the transition to "NVIDIA 3.0". And then, once Project Denver arrives, NVIDIA will have to compete head-to-head with Intel on Intel's home turf.
Fortunately for NVIDIA, ARM mobiles and HPC are both growth markets, so it's not all bad news. Then there's the fact that NVIDIA CEO Jen-Hsuan Huang is a ruthless, wily competitor who has managed to grow NVIDIA despite some long odds. So while NVIDIA is probably poised for a rocky few quarters ahead as its discrete GPU comes under attack serious and sustained attack from both Intel and AMD, it's way too early to declare the company doomed.
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Kelly Ripa Yvonne Strzechowski Rhona Mitra Kelly Rowland Danica Patrick
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