nvidia's market share hits 90% amid gpu sales slump
Santa Clara, Friday, 13 December 2024.
Nvidia has achieved an unprecedented 90% market share in the AIB GPU sector during the third quarter of 2024, despite a significant decline in overall GPU shipments. Seasonal trends typically favor an increase in shipments during this period, but this year saw a 14.5% drop, marking only the second time in a decade that shipments have decreased in Q3. Nvidia’s dominance comes as competitors like AMD and Intel struggle, with AMD holding just 10% of the market and Intel at 0%. This shift raises important questions about competition and innovation within the GPU industry. Analysts suggest that Nvidia’s strategic positioning and manufacturing prowess have put it far ahead of its rivals. This market scenario could potentially impact Nvidia’s stock performance positively, even as broader economic forecasts predict challenges due to anticipated tariffs and stagnant wage growth possibly leading to a recession.
Market dynamics and shipment trends
The GPU market experienced an unusual decline in Q3 2024, with shipments falling to 8.1 million units from 9.5 million in Q2 [1]. This -14.5 percent decrease defies historical patterns, as Q3 typically sees an average increase of 7.9% [1]. The downturn coincides with consumer anticipation for next-generation products, including Nvidia’s RTX 50 series and AMD’s RX 8000 series [2]. Total CPU shipments reached 20.1 million units, showing a quarterly increase of 42.2% but a year-over-year decline of 3.4% [1].
Competitive landscape shifts
AMD’s position has significantly weakened since its acquisition of ATI in 2006, with its market share now at just 10% [2]. The company’s CEO, Lisa Su, acknowledges the challenge but maintains a long-term perspective, predicting the specialized AI chip market will reach $500 billion by 2028 [3]. Meanwhile, Intel is attempting to re-enter the discrete GPU market with its Arc B580, priced at $249 and scheduled for release on December 13, 2024 [4].
Future market outlook
Industry analyst Jon Peddie Research (JPR) projects a challenging future for the GPU sector, forecasting a -6.0% compound annual growth rate from 2024 to 2028 [1]. This pessimistic outlook stems from concerns about higher end-user prices due to projected tariffs [1]. The overall GPU market is expected to reach 119 million units by 2028 [1]. In the data center segment, Nvidia’s dominance is equally pronounced, with the company capturing 65% of the AI chip market in 2023, generating $17.7 billion in revenue [6].