SAN JOSE, Calif. Intel will make some gains at the expense of Nvidia in a declining graphics market, according to a new report from financial analysts at Barclays Capital. By 2010, Intel could command about 55 percent of the overall graphics market while Nvidia will slide to about 24 percent, the report projected.
Unit sales of graphics chips could fall 17 percent this year and be flat in 2010, according to the Barclays report released Friday (March 20). The company projects graphics prices will fall five percent, driving the value for the sector down 22 percent to $5.8 billion this year.
Intel could fare better than average in graphics because it dominates in the market for integrated parts, the largest slice of the pie and the one likely to see a more moderate decline, according to the report. For example, Intel commands 76 percent of the market for integrated graphics chips in notebooks, one of the few markets that will actually see very minor growth in 2009, Barclays said.
By contrast, the market for discrete graphics chips, dominated by Nvidia with a 62 percent share, will decline about 32 percent this year. The report projected Advanced Micro Devices will make modest gains, nudging its overall graphics market share up just one point to 20 percent through 2010.
By 2013 integrated graphics could die out, one market watcher projected recently. That's because graphics is jumping on PC processors.
Intel will ship this year Westmere, its 32nm processor with integrated graphics, a product Barclays said will further disrupt the sector. AMD is expected to release a similar product, however it may not debut until 2011.
Speculation has circulated that Nvidia might develop its own x86 core to follow the trend. But Barclays suggested the company is more likely to team up with a second-tier x86 vendor such as Taiwan's Via.
Intel is also jumping into the market for discrete graphics chips with its upcoming multicore Larrabee design, described last August. However Barclays projected the part will have "modest impact" on Intel's revenues through 2010.
"With the market in transition, vendors are focusing on new opportunities in handsets, netbooks, and high performance computing," the report said.
For example, Nvidia has rolled out graphics products for high-performance computing, PC chip sets and handhelds. But the report predicted Nvidia's Tesla GPU for high-end systems and Tegra, an ARM-based processor for mobiles it launched in June will see only modest traction over the next two years.
Nvidia set a "bold target" for Tegra sales of more than $100 million in the second half of 2009. But "given current design wins with smaller Asian vendors," Barclays projected Tegra sales will only hit $35 million this year and $100 million in 2010. "We also believe that the Tesla program is tracking below our earlier expectations," the report said.