Intel's legal issues help AMD gain in graphics market

AMD also gained on record product shipments in Q2

Record product shipments and Intel's legal issues helped Advanced Micro Devices gain share in the graphics market during the second quarter, market analysis firm Jon Peddie Research said on Friday.

Intel maintained its lead in the shipment of graphics products with a 54.9 percent market share during the second quarter, growing from 51.1 in last year's second quarter. But AMD took advantage of Intel's legal issues and Nvidia's weak product execution to gain market share, said Jon Peddie, president of Jon Peddie Research (JPR).

AMD product shipments grew by 32.6 percent year-over-year, compared to Intel's 7.6 percent growth in shipments. AMD's market share went up to 24.4 percent from 18.4 percent last year, driven by the "biggest gains for both discrete and integrated desktop products in the company's history," Peddie said. AMD offers graphics products under the ATI brand.

AMD may have also gained ground on Intel's legal troubles, Peddie said.

"I think it ... freed up a lot of management time to take care of business, and it took the restraints off the PC makers to make a choice based on price performance," Peddie said.

Intel's modest growth in the graphics market was driven by growth in desktop, laptop and netbook CPUs, which integrate graphics capabilities. But the chip giant has came under scrutiny for monopolistic behavior to shut out rivals like AMD and Nvidia. The European Commission in May last year fined Intel €1.06 billion (US$1.45 billion at the time), and the New York attorney general filed a case against Intel in November. Intel also paid AMD US$1.25 billion last year to settle antitrust and patent disputes.

The U.S. Federal Trade Commission (FTC) filed a complaint against Intel in December, charging Intel with illegally using its dominant position to stifle competition. Most of the investigations against Intel have revolved around CPUs, but the FTC expanded the scope of the complaint to include Intel's practices in the graphics-processor market.

But both Intel and AMD gained at the expense of Nvidia, whose year-over-year shipments dropped 32.4 percent. Nvidia's market share also fell to 19.7 percent during the second quarter from a 29.2 percent market share a year ago. Nvidia has had troubles as consumers shift to lower-priced GPUs and integrated graphics, and AMD is ahead in the release of graphics products that support Microsoft's latest DirectX 11 technology.

"Nvidia had some startup problems with Fermi, which gave ATI more running room," Peddie said. Fermi is Nvidia's latest graphics-processor microarchitecture that offers support for DirectX 11. The company released its first Fermi-based graphics card earlier this year, while AMD started offering DirectX 11 cards last year.

Nvidia on Wednesday lowered its second-quarter revenue expectations, blaming higher memory costs. PC makers are sacrificing components like discrete graphics cards for memory to offer competitively priced laptops.

JPR projected shipment of graphics products -- including integrated and discrete graphics -- to reach 525 million, growing 26.8 percent compared to last year.

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