The discrete graphics card market has experienced a remarkable transformation over the past year, signaling a promising era for consumers. According to a report by Jon Peddie Research (JPR), this market has undergone substantial changes in both value and product volume, largely benefiting those seeking graphics card upgrades. In this article, we will delve into the key findings of the report, highlighting the reasons behind this shift and its implications for consumers.
Surge in Shipments, Drop in Value
One of the most significant revelations from the JPR report is the substantial increase in discrete graphics card shipments from AIB (Add-In-Board) partners. Year-over-year, there has been a staggering 32.2% rise in overall shipments from industry giants Nvidia and AMD. This surge in supply is excellent news for consumers, as it suggests that graphics card availability may improve in the coming months.
However, this increase in supply has come at a cost to the AIB market’s overall value. The market value plummeted by $4 billion, declining from $12.4 billion to just $8.6 billion. The primary reason behind this drop in value is the lower prices of GPUs in the current year. While this may impact industry revenues in the short term, it bodes well for consumers as it sets the stage for more affordable graphics cards.
Price Trends and Consumer Benefits
The drop in AIB market value has brought about an encouraging change: a reduction in average selling prices (ASPs) of AIB partner cards. The start of 2022 marked a significant milestone as it was the first time in eight quarters that ASPs began to decline. For consumers who have been struggling to secure reasonably priced graphics cards, this shift is a breath of fresh air.
Looking ahead, JPR paints an optimistic picture for the graphics card market. The research firm estimates that the market will grow from its current value of $46 billion to $57 billion by 2025. This growth is expected to be driven by Intel’s anticipated entry into the AIB partner market by 2023. Despite the recent dip in market value, the future appears promising, with the potential for continued price reductions.
Recovery from Inflation and Market Share Shift
The recent decline in market value can be attributed to the excessive cost inflation of graphics cards observed in 2020 and 2021. However, 2022 has seen a swift recovery from these inflated prices. If JPR’s predictions hold true, the market will regain its lost value through increased GPU shipments, which should help maintain the affordability of graphics cards.
Market share dynamics have also undergone a subtle transformation. In Q1 of 2021, AMD held a 20% market share in the discrete GPU market, while Nvidia dominated with an 80% share. In Q1 of 2022, the market share shifted slightly towards AMD, which now boasts a 24% market share, while Nvidia’s share stands at 75%. While not a seismic shift, this change is noteworthy, especially for AMD, which has been striving to gain ground in the GPU market for years.
In summary, 2022 has emerged as a year of recovery and promise for the discrete graphics card market. Increased shipments and declining prices are positive indicators for consumers seeking reasonably priced GPUs. As the market continues to evolve and with the potential entry of Intel as a major player, there is hope that graphics card pricing will remain competitive. Barring unforeseen disruptions, the trend towards affordability in the current-generation GPU market is likely to persist, benefitting consumers and enthusiasts alike.