AMD overtakes NVIDIA in overall GPU unit shipments for the first time in five years.
Jon Peddie Research has released its Q2 2019 GPU market results, confirming that AMD shipped more graphics units than Nvidia for the first time in five years. AMD achieved this milestone by shipping almost 9.85% more GPUs than in Q1, while Nvidia sold about the same volume. According to market share data representing cumulative shipments of all types of desktop PC graphics units, AMD claimed 17.2% market share compared to Nvidia's 16.0%, with Intel holding the dominant 66.9%. The last time AMD led in GPU shipments, the Radeon R9 290X was the fastest gaming GPU available, and Nvidia had not yet released Maxwell. Nvidia maintained market leadership from the launch of Maxwell-based 9-series GPUs until this quarter.
The market dynamics reveal complex underlying trends. While AMD saw a unit growth of 4.1% year-over-year, Nvidia experienced a -15.9% decline, and Intel saw -12.2% growth. The PC market itself increased by 9.25% since the last quarter, yet discrete GPUs were present in fewer machines, declining from 29% to 27%. AIB sales actually declined 16.62% since the last quarter, demonstrating that despite overall market growth, Nvidia's shipments remained relatively flat while AMD experienced significant gains.
AMD's resurgence is somewhat surprising given its competitive disadvantages. AMD does not have a faster GPU than Nvidia, does not support hardware-accelerated ray tracing in any capacity, has weak presence in the laptop market, and lacks a full product stack based on its most recent architecture. The gains likely stem from "the abundance of cheaper 14nm 500-series and Vega GPUs, decent APU graphics performance, and" potentially "promising 5700-series support." However, AMD would likely not be "generating revenue than Nvidia because less expensive products are not usually high margin products," presenting a strategic challenge despite shipment leadership.
The implications for Nvidia are significant, particularly given its heavy dependence on the PC gaming market. Nvidia no longer reports gaming GPU sales as a separate segment, and has recently experienced market share decline in China, falling to less than 60%. The company enjoyed a record year of revenue driven by Turing-based graphics cards, but "though Nvidia does have sources of income from the data center and professional users, gaming still makes up the bulk of Nvidia's revenue." AMD's recent gains will likely encourage Nvidia to diversify more quickly to compete with AMD, which is already a "diverse company," and Intel, which is planning to enter the discrete GPU market in just a couple of years.