Graphics card sales dropped significantly – both in terms of separate (standalone) GPUs and integrated (built-in) GPUs – in Q2, and the Nvidia lineup was particularly strong according to the latest data from an analytics firm.
How Tom’s gear (opens in a new tab) reports, Jon Peddie Research (JPR) released data for the second quarter of 2022 which show that overall GPU sales fell by 14.9% compared to the previous quarter, due to declining demand for PCs – with rising cost of living without doubt starting to play a bigger part in it.
Shipments of standalone graphics cards fell more than integrated graphics cards, by 22.6%, and Nvidia was the hardest hit, with sales dropping 25.7% in Q2. This is in stark contrast to AMD’s much less significant decline of 7.6% compared to the previous quarter.
Intel fell 9.8% as integrated GPUs also fell, and shipment of PC processors fell 7% quarter-on-quarter (and 34% year-on-year, which is also eye-opening).
These are some worrying drops, especially for Nvidia, and the overall future of the GPU industry looks shaky, as JPR notes, writing: European economy; The UK is in a recession with high inflation.
“Forecasting has never been more difficult and as a result our forecast and others will be updated frequently as new data becomes available.”
Analysis: Claustrophobic and difficult time for Nvidia?
The decline in graphics card sales highlights what we’ve been hearing for a while – that the lack of supply is no longer a problem, but is easing the demand, especially for Nvidia GPUs. Team Green made it clear in the aftermath of the company’s recent fiscal results that too many GeForce graphics cards had been produced and that there is now an oversupply issue.
The really thorny aspect of this overshoot in the production of current-generation RTX 3000 GPUs is that the cost of ownership and the inflation crisis are becoming more and more felt over time, as well as the introduction of next-gen graphics cards (RTX 4000, and RDNA 3 for AMD) it’s close now. So people will increasingly want to wait for the big leaps in performance that next-generation products are bringing, rather than buying now – unless the price really is right.
Taking all of this into account, these figures – and this particularly dramatic drop for Nvidia – are not surprising and support a recent rumor claim that Team Green intends to implement much larger price-cutting measures than the reductions we have applied. already seen. Indeed, we have heard that this is a move that will come soon – in September – from the two current reports.
AMD is also said to be further discounting its current-generation RX 6000 cards, but it is Nvidia in particular that suffers from the larger drops in sales, as we can see here, and Team Green has found itself in an unpleasant situation where the difference between current and next-gen GPUs they shrink quickly, creating a very claustrophobic environment with very little room for maneuver.
That said, the theory is that big price cuts aren’t the only possible solution – Nvidia says it may look elsewhere to offload GPU oversupply, such as in data centers for cloud services – but in fact we expect a higher price The GPU is coming soon to cut the cards on the shelves, one way or another.
And with the figures popping up in this recent JPR report, it seems more likely that Nvidia will take action on the price front – either that or face the need to delay the launch of the next-gen Lovelace, which is another possibility here. There could be a staggered launch with larger gaps between the RTX 4090 (supposedly first out of the goal) and the other RTX 4000 models to leave more room for shedding excess RTX 3000 inventory, possibly coupled with the latter’s price drops.
In any case, it looks like Nvidia needs to take more decisive action to help navigate the GPU waters, which are getting more choppy as 2022 advances.