Graphics card sales dropped sharply – in terms of discrete (standalone) and integrated (built-in processors) GPUs – in the second quarter, and Nvidia’s lineup took a particularly sharp defeat according to the latest from a firm of analysts.
As Tom’s Hardware (opens in new tab) reports, Jon Peddie Research (JPR) has produced figures for the second quarter of 2022 that show that overall GPU sales are down 14.9% compared to the previous quarter, due to demand for PCs decreasing – with the cost of living rising. , no doubt starting to play a bigger part in this.
Shipments of standalone graphics cards dropped more than integrated graphics, down 22.6%, and Nvidia was the hardest hit, with a 25.7% drop in sales in the second quarter. This clearly contrasts with a much less impactful drop for AMD of 7.6% compared to the previous quarter.
Intel dropped 9.8% as integrated GPUs also dropped, with the number of PC processors being shipped down 7% from the previous quarter (and 34% year-over-year, a pretty surprising number as well).
These are some worrisome drops, particularly for Nvidia, and the overall future of the GPU industry looks shaky as JPR notes, writing that: the jitters these events create have discouraged Europe’s economy; the UK is in recession with high inflation.
“Forecasting has never been more challenging, and as a result, our forecast and others will be revised frequently as new data emerges.”
Analysis: A claustrophobic and difficult time for Nvidia?
The falling graphics card sales underscore what we’ve been hearing for a while – that lack of supply is no longer the problem, but waning demand, particularly for Nvidia’s GPUs. The Green team made it clear enough after the company’s recent fiscal results that too many GeForce graphics cards were made, and now there’s a problem with oversupply.
The really thorny part about this overshooting with the manufacture of current-gen RTX 3000 GPUs is that the cost of living and inflation crisis are becoming more felt as time goes on, in addition to the release of high-end graphics cards. (RTX 4000, and RDNA 3 for AMD) is getting pretty close. So it’s increasingly likely that people will want to wait for the big leaps in performance that high-end products bring, rather than buying now – unless the price really is right.
Given all that, these numbers – and this particularly dramatic drop for Nvidia – aren’t surprising, and they confirm the recent rumor claim that Team Green will implement much greater price reduction measures than the reductions we’ve made. seen. In fact, we hear this is an imminent move – in September – from two reports now.
AMD is also discounting its current-gen RX 6000 cards even further, but it’s Nvidia in particular that suffers the biggest sales drops as we see here, with Team Green stuck in a nasty situation where the gap between current and next generation GPUs are rapidly shrinking, creating a seriously claustrophobic environment with little wiggle room.
That said, the theory is that big price cuts aren’t the only possible solution – Nvidia said it could look elsewhere to offload GPU oversupply, such as data centers for cloud services – but in reality, we hope a higher price of GPU cuts to cards on shelves soon, one way or another.
And with numbers coming in like this latest report from JPR, it seems more likely that Nvidia will take action on the pricing front – either that, or face having to delay the launch of the next-gen Lovelace, which is another possibility here. A staggered release with larger gaps between the RTX 4090 (supposedly out of the gate first) and other RTX 4000 models could ensue, to leave more room to free up excess RTX 3000 stock, possibly in combination with price drops for the latter.
Whatever the case, it looks increasingly like Nvidia needs to take some firmer actions to help navigate the GPU waters that are getting increasingly choppy as 2022 progresses.