Video card sales plummet to lowest level in ten years

The greed of GPU manufacturers and OEMs assembling the finished product seems to have come to an end, with the strategy of shipping overpriced graphics accelerators directly to cryptocurrency miners leading to an inevitable collapse in sales. Ironically, the bursting of the bubble in the cryptocurrency market coincides with both a GPU inventory glut and a global recession, leaving players like Nvidia in the position of intentionally “sabotaging” the launch of the next generation of video cards just to get rid of the huge stockpiles of GPUs left over from the previous generation.

In short, NVIDIA has chosen to launch the new generation RTX 4xxx accelerators at much inflated prices, precisely to make the old generation RTX 3xxx look more attractive to buyers who, for now, have little choice. And for Nvidia, the clock is ticking ever more urgently, with rival AMD preparing its own Radeon RX 7000 accelerator offering.

The bad news is that the expected “rescue” from rival AMD seems to be another compromise solution, where users are left to choose between the “stellar” performance of the GeForce RTX 4090 series and the roughly halved price by choosing the AMD Radeon alternative.

In the meantime, both AMD and especially NVIDIA seem to be moving towards a “crash landing” from the paradigm of selling GPUs at any price, to entrepreneurs who are just outfitting cryptocurrency farms with thousands of graphics accelerators, back to “value” based competition calculated by price/performance criteria.

Adding to the GPU makers’ “woes,” the major PC makers not only missed out on the seasonal sales growth expected at the start of the school year, they even had to reassess their sales forecasts for the coming period. And that translates into diminished component orders.

Closely related to OEM PC sales, shipments of discrete GPU units fell to 75.5 million units in Q3-2022, down 10.5% from Q2 and 25.1% when compared to the same period last year. Taken as a breakdown, the decline in shipments is 15.43% for GPU units for desktop PCs and 30%, in the laptop segment. Thus, this is the largest drop in reported sales since 2009 and so far.

As Intel is the largest processor manufacturer, the company is also the largest supplier of PC graphics processors. Intel has increased its market share to 72% of the PC GPU market in Q3-2022. In contrast, Nvidia fell to 16 market account amid an overall sales decline of 19.7%. In contrast, AMD reached a 12% market share, with its GPU unit shipments down 47.6% compared to the same periods last year.

Exceptionally, sales of desktop discrete graphics cards fell to 6.89 million or 33.5% quarter-over-quarter, the weakest quarterly result in years.