Discrete GPU shipments
Global GPU (graphics processing unit) shipments fell in the fourth quarter of 2018 as the cryptocurrency cycle disrupted the normal seasonal trend and created excess GPU channel inventory.
JPR (Jon Peddie Research) released data on AIBs (add-in-board) that included discrete GPUs found in PCs, workstations, servers, crypto mining farms, and other high-computing devices. The discrete GPU segment of the market was hit the hardest by the crypto bubble.
According to the JPR data, AIB shipments fell 10.7% sequentially and 40.2% year-over-year in the fourth quarter of 2018, beating the ten-year average of a 2.3% decrease. NVIDIA (NVDA) is a market leader in this segment, and its only rival is Advanced Micro Devices (AMD). However, Intel (INTC) is looking to enter this market in 2020 with its own discrete GPU.
Discrete GPU market share
AMD had a larger exposure to the crypto trend, as its Vega GPUs were more popular among crypto miners. The crypto trend reduced the gap between AMD’s and NVIDIA’s market shares in the first two quarters of 2018. However, the end of the crypto boom removed crypto’s gains, and AMD’s market share slipped from its high of 36.1% in the second quarter of 2018 to 25.7% in the third quarter and 18.8% in the fourth quarter. AMD’s market share dropped as its Vega GPUs failed to gain traction among gamers.
One’s loss was another’s gain: NVIDIA’s market share dropped to as low as 63.9% in the second quarter of 2018 and then jumped to 74.3% in the third quarter and 81.2% in the fourth quarter. NVIDIA’s market share rose as gamers started purchasing its GPUs. Its market share rose even though its overall GPU shipments fell 7.6%, as market share is relative to competitors’ performances. The increase in its market share shows that NVIDIA did well compared to AMD in the overall weak GPU market.
This year should see the GPU market normalize and AMD’s and NVIDIA’s earnings and market shares return to pre-crypto levels. We’ll look into this prospect next.