PC crash, Nvidia graphics card sales plummet

Sales of graphics processing units (discrete and integrated) fell 14.9% sequentially in the second quarter of 2022 due to weak consumer demand for PCs and reduced purchases by parts distributors and PC manufacturers. Therefore, the decline in discrete GPU shipments was greater than that of integrated GPUs, which is why Nvidia's unit sales fell by 25.7% sequentially.

According to data from Jon Peddie Research, PC CPU unit shipments fell 7% month-on-month and 33.7% year-on-year. As a result, GPU shipments fell 14.9% month-on-month. JPR data shows that among the three major GPU suppliers, AMD's GPU sales fell the smallest month-on-month by 7.6%, Intel's shipments fell by 9.8%, and Nvidia's unit sales fell by an astonishing 25.7%.

Sales of desktop discrete graphics cards, including the best gaming graphics cards, fell 22.6% sequentially in the second quarter to approximately 10.37 million units, the lowest number of desktop discrete graphics cards sold in each quarter since the second quarter of 2020. This is perhaps expected since everyone who wants to get an AMD Radeon RX 6000 series or Nvidia GeForce RTX 30 series graphics card has already done so.

As for market share, Intel remained the leading GPU supplier in Q2 2022 with 62% market share, with AMD in second place with 20% market share (compared to 16% in Q2 2021). growing), with Nvidia in third place with 18% of the market (up from 15% a year ago).

PC makers and distributors typically reduce orders to chip companies in the second quarter. This time, however, they have reduced their purchases more significantly than usual, possibly because their inventory is full and they have to sell what they have first.

"GPU supplier performance overall was poor this quarter compared to the previous quarter," said Jon Peddie, president of JPR. "Things like the ongoing war in Ukraine, Russia's manipulation of natural gas supplies to Western Europe, and the aftermath of these events Global events such as the ongoing tensions have put a damper on the European economy; the UK is in the midst of a high-inflation recession. Forecasting has never been more challenging, so our and others' forecasts are subject to change as new data emerges. Will be revised frequently."

The decline in graphics card sales underscores what we've been hearing for a while - that insufficient supply is no longer the issue, but rather weak demand, especially for Nvidia's GPUs. After the company's recent financial results, Team Green made it clear that too many GeForce graphics cards had been manufactured and there was now an oversupply problem.

The really tricky thing about this overshoot made by the current generation of RTX 3000 GPUs is that the cost of living and inflation crisis is getting more intense over time, coupled with the next generation of graphics cards (RTX 4000, and for AMD's RDNA 3) is pretty close. So it's increasingly likely that people will want to wait for the big performance leap that the next generation brings rather than buy right away - unless the price is really right.

With all that in mind, these numbers - and Nvidia's particularly significant drop - aren't surprising, and they support the recent rumor mill's assertion that the Gree team will implement bigger price cuts than we've already seen. In fact, we're hearing from two reports now that this is an initiative that's coming in September.

AMD is also said to be further discounting its current-generation RX 6000 cards, but as we've seen here, with Nvidia in particular suffering a larger sales decline, Team Green is put in an unpleasant position where both the current and The gap between next-generation GPUs is closing rapidly, creating a severely claustrophobic environment with little precious wiggle room.

That said, in theory, slashing prices isn't the only possible solution -- Nvidia has said it might look elsewhere to ease the GPU oversupply, like in data centers for cloud services -- but in reality, we'd expect higher GPU prices one way or another to cut down on the cards on the shelves sooner rather than later.

With the numbers coming out of JPR's latest report, it seems more likely that Nvidia will take action on pricing - either, or face having to delay the release of the next-gen Lovelace, which is another possibility. There could be staggered releases with a wide gap between the RTX 4090 (said to be out first) and other RTX 4000 models to allow more breathing room to get rid of excess RTX 3000 inventory, possibly combined with price drops for the latter.

Regardless, it's looking increasingly like Nvidia needs to take some firmer action to help navigate the GPU waters, which are becoming increasingly choppy as 2022 rolls around.

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