The market of various graphics adapters increased considerably in the third quarter both sequentially and annually. Despite of expectations, ATI, graphics product group of Advanced Micro Devices, did not manage to take back market share from its rivals Intel Corp. and Nvidia, whereas the latter succeeded in winning another portion of the market from its competitors.

?The third quarter of 2007 was the second quarter in a row to surprise us. There was growth in the second quarter, which is normally a slow period, and the third quarter, which is usually good, was a record this time. We attribute the market's performance to increased demand by consumers for multimedia-rich systems, and, to a certain extent, to demands of Vista,?said Jon Peddie, president of Jon Peddie Research in Tiburon California.

Total shipments for the quarter were 97.85 million units, up 20% in over?a href="http://www.xbitlabs.com/news/video/display/20070731214149.html" target="_blank">the second?quarter. Compared to the same quarter last year shipments were up 18.2%. During the quarter Nvidia Corp. increased its shipments by 25.1%, Intel Corp. boosted sales of its chipsets with built-in graphics core by 21.6%, whereas graphics product group of AMD only posted 17.8% shipments raise.

As?a result, Intel remains on top of the market with 38% share, whereas Nvidia lags behind the leader by only 4.1% with 33.9%, the highest market share that Nvidia has had in many years. Meanwhile, Advanced Micro Devices lost 0.4% of the market and now commands 19.1%, which means that it ships two times less graphics adapters than Intel and roughly 44% less compared to Nvidia.

Even though unit shipments at AMD increased by 17.8%, this means that the company still shipped less graphics adapters than back in Q4 2006 with a moderate, 8%, increase over Q3 2006. Given that AMD started sales of its ATI Radeon HD 2000-series graphics adapters in the third calendar quarter, it may seem as a surprise that it did not manage to win back the market share. On the other hand, ATI started to drop the market share in Q3 2006, when its management agreed to sell the company to AMD. When AMD executives gained control over the graphics company in Q4 2006, the company began to lose ground in the graphics market.

The desktop saw market share growth from 68.5% last quarter to 73.6% this quarter, or 72 million units. On the desktop, Nvidia held its first place position claiming 37.8% against Intel's 33.5%, while AMD/ATI had a modest loss to 17.5%, which may also seem as a surprise in the light of the ATI Radeon HD 2000 introduction.

In the mobile market Intel held its dominant position but slipped slightly to 50.9%, with AMD taking back the number two position at 23.4% and Nvidia coming in at 22.8%. Mobile chips continued their growth in units with 25.8 million units (up less than one percent over the last quarter), to claim 26.4% of the market, down from 31.5% last quarter.

?There is strong overall demand. There is little shift in market share between GPU vendors quarter to quarter which suggests there is no channel stuffing or double ordering. However, Nvidia's G80 has exceeded expectations and is on allocation,?Mr. Peddie added.

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