Buoyed by Netbook sales, shipments of Intel graphics chips surged and Advanced Micro Devices gained on Nvidia in the third quarter.
Third-quarter shipments of graphics processors jumped 21.2 percent over the second quarter, according to market researcher Jon Peddie Research. Graphics chips drive the images produced on PC users' screens.
A total of 119.45 million units were shipped in the third quarter, exceeding the record 111 million units that shipped in the third quarter of 2008, according to Jon Peddie, president of Jon Peddie Research. "So the market has caught up with, and exceeded, last year's highs. The crash of fall 2008 is now behind us," he said in a statement.
The third quarter exceeded a robust second quarter. "Q2 was already a great quarter clearly signaling the holidays will be robust for PCs and the industry in general," Peddie said.
AMD gained on discrete graphics chip leader Nvidia in quarter-to-quarter growth.
(Credit: Jon Peddie Research)AMD showed the biggest jump in quarter-to-quarter growth at 30 percent, followed by Intel at 21 percent. But Intel dominates raw shipments. "Intel shipped the most parts at 63 million, over twice as many as its nearest competitor Nvidia," according to Peddie, who said Intel had a 53 percent share of the market in the third quarter. Nvidia was second with 24.9 percent, followed by AMD with 19.8 percent.
Surging Netbook shipments are behind the big Intel numbers. Integrated graphics in notebooks, which includes Netbooks, increased 27 percent over the second quarter. Integrated graphics are built into supporting Intel silicon called chipsets.
"Netbooks will remain popular but they will not have the high market share they had during the recession when they were just introduced. Rather, consumers are expected to 'buy up' in the next quarter," according to Peddie.
Fourth-quarter shipments may not be as strong as the third quarter, however. "The channel is full...That suggests that while Q4 is typically a good quarter for PCs, the quarter-to-quarter growth in Q4 may not be as robust as Q3. Graphics are a great leading indicator. The graphics go in before the PC is built or shipped," Peddie said.
Sony said that a small percentage of Vaio laptops with Nvidia graphics chips may experience problems and the company offered to provide an extended warranty to cover the cost of repair. This follows similar statements by Apple, Hewlett-Packard, and Dell.
Sony Vaio VGN-AR series laptop
(Credit: Sony)Nvidia first disclosed the problem with its graphics chips in July 2008, saying at the time that graphics processors manufactured with a certain material set were failing in the field at a higher than normal rate.
In a Sony eSupport USA notice dated August 3, the company said: "Sony, in cooperation with Nvidia, has been looking into any possible effect to Vaio notebooks with Nvidia graphic processors. Until recently we had not identified any Vaio models that were affected by this issue."
The statement continues. "However, after closely monitoring the situation, Sony has now determined that a very small percentage of Vaio computers with the Nvidia graphics chips may experience this issue. These PCs may exhibit distorted video, duplicate images or a blank screen due to a failure of the Nvidia graphics chip."
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Nvidia said that some notebooks with its chips continue to have "failure" issues, in a filing with the Securities and Exchange Commission on Wednesday.
In the Form 10-Q filing, Nvidia stated that though it does not continue to see "abnormal failure rates" in systems using Nvidia products," some notebooks are still affected.
Specifically, Nvidia said: "We continue to not see any abnormal failure rates in any systems using Nvidia products other than certain notebook configurations. However, we are continuing to test and otherwise investigate other products," Nvidia said, adding, "there can be no assurance that we will not discover defects in other MCP or GPU products." (MCP stands for Media and Communications Processor; GPU stands for Graphics Processing Unit.)
On July 2 of last year, Nvidia announced it was planning to take a one-time charge to cover costs associated with problems with materials used in certain versions of its laptop graphics chips. Subsequently, a $196 million charge was recorded in the second quarter of its 2009 fiscal year to "cover anticipated customer warranty, repair, return, replacement and associated costs" with the problem.
In the 10-Q filing, Nvidia cited a "balance of $145.7 million associated with incremental repair and replacement costs from a weak die/packaging material set." and "$31.2 million for the three months ended April 26, 2009 in payments related to the warranty accrual associated with incremental repair and replacement costs from a weak die/packaging material set."
Nvidia paid or incurred $50.3 million against the original "warranty accrual" in its fiscal third quarter and fourth quarter 2009, such that the remaining balance of the "bump-crack accrual" (defect) was $145.7 million at the end of its fiscal fourth quarter, according to Nvidia.
Nvidia is also grappling with insurance companies over payments to PC makers for GPU failures, according to reports.
As early as 2007, Hewlett-Packard listed laptop models affected by the graphics chip glitch. In August 2008, Dell also listed affected models. And Apple said in October that it would repair faulty graphics chips.
In the 10-Q filing, Nvidia also stated (some cases were cited in previous Nvidia filings) that "in September, October and November 2008, several putative consumer class action lawsuits were filed against us, asserting various claims arising from a weak die/packaging material set in certain versions of our previous generation MCP and GPU products used in notebook systems."
Most of the lawsuits were filed in federal court in the Northern District of California, but three were filed in state court in California, in federal court in New York, and in federal court in Texas, Nvidia stated. "Those three actions have since been removed or transferred to the United States District Court for the Northern District of California, San Jose Division, where all of the actions now are currently pending."
Some of the lawsuits, such as "Inicom Networks, Inc. v. NVIDIA Corp. and Dell, Inc. and Hewlett Packard," include Dell and HP.
Micron Technology is entering the graphics memory business, going up against heavyweights Samsung and Hynix.
Micron is targeting its memory at the upper mid-range of the graphics chip market
(Credit: Nvidia)Micron, which recently vaulted to the No. 3 spot in global sales of dynamic random-access memory (DRAM), is now aiming at the market for DRAM chips used with graphics processors from Nvidia and Advanced Micro Devices' ATI graphics unit.
The market for DRAM used with graphics processors is about 4 percent of the bits shipped into the DRAM market, according to Micron. DRAM is typically used as the main memory in PCs. This type of DRAM is also referred to as Synchronous DRAM, or SDRAM.
"Our upcoming 50-nanometer technology is very competitive when it comes to power consumption and performance," Robert Feurle, Micron's VP of DRAM marketing, said in a phone interview Thursday.
"I think it's a good point in time to begin discussions with big enablers Nvidia and AMD and get started with some design-ins," Feurle said.
Micron is making its debut with Double Date Rate 3 (DDR3) memory. This is the same type of memory used for the main memory of currently shipping PCs, which have gravitated from DDR2. In the future, Micron will look at making more proprietary graphics memory, referred to as GDDR3 and GDDR5. "No decision has been made yet but we're looking into that very seriously," Feurle said.
Initially, Micron is targeting the "upper mid-range" of the graphics processor market.
Micron says its DDR3 has a distinct power consumption advantage over GDDR3: standard DDR3 can go down to 1.35 volts. "GDDR3 is still running a 1.8 volts. We have a giant power savings advantage," he said.
Micron is targeting memory with speeds of 1600MHz "to get started with and going up from there," Feurle said.
The DRAM market overall has seen sliding sales, falling 20 percent in the first quarter from the fourth quarter and 44 percent from the year-earlier period, according to iSuppli. The problem is overcapacity, which has most notably brought Taiwan memory makers to their knees. In that country, some manufacturers have faced possible bankruptcy.
"Micron now has renewed its competitive vigor, mainly due to its acquisition of a 300mm fab from Inotera in Taiwan," iSuppli said recently. Fab refers to fabrication facility or factory.
On Thursday, Nvidia reported a first-quarter loss, as revenue fell 42 percent from last year. But the graphics chipmaker said inventory was easing.
The company announced a net loss of $201.3 million, or 37 cents a share. Last year in the same period, the company posted a profit of $176.8 million, or 30 cents a share.
Revenue was $664.2 million, down from $1.15 billion for the same period last year. This was better than the analysts' average estimate of $534.4 million, however.
Adjusted net loss was 9 cents a share. Analysts had expected a loss of 10 cents a share, according to Reuters estimates.
"We made good progress managing expenses and significantly reducing inventory," said Jen-Hsun Huang, CEO of Nvidia, in a statement. Inventory decreased from 144 to 64 days sequentially. Revenue grew 38 percent sequentially from the previous quarter.
Chip giant Qualcomm said that it is seeing a pickup in chip demand. Separately, two chip industry research firms said graphics chips shipments rose in the first quarter.
Qualcomm indicated on Monday that it is encouraged by demand. "We're feeling more comfortable looking forward...We're happy to see chip demand up," CEO Paul Jacobs said during the company's second-quarter earnings conference call. "We're happy to see inventories stabilizing, reaffirming the device demand, we have very strong operating cash flows," he added.
The world's largest maker of cell phone chips had revenue of $2.46 billion, down from the $2.61 billion posted in the same quarter last year, and posted an operating loss of $10 million, reflecting a $748 million charge for litigation settlement related to the settlement and patent agreement with Broadcom.
The sentiment expressed by Qualcomm's CEO adds weight to comments made by Intel earlier this month in its first-quarter earnings conference call. "I believe the worst is now behind us from an inventory correction and demand-level adjustment perspective," Intel CEO Paul Otellini said on April 14.
Reports from market research firms were also positive. On Tuesday, Jon Peddie Research, which tracks the graphics chip market, said shipments were up 3.3 percent from the fourth quarter, "breaking an eight-year seasonal trend that dictated negative sales from Q4 to Q1."
Peddie attributed this, however, to going from nothing to something. "In Q3 and Q4 of 2008 the channel stopped ordering GPUs (graphics processing units) and depleted inventory in anticipation of a long drawn out worldwide recession. But, no recession, no matter how severe, results in zero sales. The world continued to turn and the consumers continued to buy, albeit they bought less," Peddie said in a prepared statement.
Also on Tuesday, Nvidia released information from Mercury Research, another firm that follows chip markets, which said overall graphics chip shipments were up 3.8 percent from the fourth quarter of 2008. The uptick was attributed to improved desktop sales.
Peddie added this cautionary statement. "Things probably aren't going to get back to the normal seasonality till Q3 this year, and we won't hit the levels of 2008 until 2010."
Updated on April 27 at 8:20 a.m. PDT with additional information about DirectX 11 and correcting for Intel comments at bottom.
Graphics chips will be tapped to accelerate more tasks in upcoming versions of Apple's and Microsoft's operating systems, according to Nvidia.
Apple's upcoming Mac OS X Snow Leopard will tap into the compute power of graphics processors
(Credit: Apple)In an interview Friday with Sumit Gupta, product manager for Nvidia's Tesla products, Gupta described how new programming environments will tap into the latent compute horsepower of graphics processors to accelerate software in Apple's upcoming OS X Snow Leopard and Microsoft's Windows 7 operating systems.
Graphics chips aren't just for games anymore. The trend toward general-purpose graphics processing is defined by an acronym that doesn't exactly roll off the tongue: GPGPU. But the essence of General Purpose computing on Graphics Processing Units is pretty simple: use the scores--or even hundreds in higher-end chips--of processing cores inside GPUs to speed tasks that, in some cases, would be done much less efficiently by the central processing unit (CPU).
This is where OpenCL (Open Computing Language) comes in. OpenCL is a programming environment for "heterogeneous" computing. That is, computers using a mix of multicore CPUs and GPUs. Microsoft's analogous programming environment is DirectX.
Apple says this about OpenCL on its Web site. "Another powerful Snow Leopard technology, OpenCL...makes it possible for developers to efficiently tap the vast gigaflops of computing power currently locked up in the graphics processing unit."
Today, on a PC or a Mac, the CPUs made by Intel and Advanced Micro Devices are adept at handling general operating system tasks. For instance, handling the sequence of things that must happen after the user clicks on an icon to start an application on their desktop.
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Nvidia aims to fortify the Mac Pro moniker with its own "Pro" graphics.
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Currently, ATI Radeon HD 4870 (L) and Nvida GeForce GT 120 are offered as standard graphics chips on Mac Pro
(Credit: Apple)The Quadro FX 4800, packing 192 processing cores, targets professional graphics customers, including scientists, engineers, and designers.
The Mac card features a standard 3-pin stereo connector for 3D stereoscopic imaging, critical to many core professional Mac applications, Nvidia said.
The 4800 also features a large 1.5GB frame buffer (used to refresh the on-screen image) and memory bandwidth up to 76.8 gigabytes per second. By comparison, the Nvidia GeForce GT 120, which is currently offered by Apple as a standard graphics card on the Mac Pro, has memory bandwidth of 25.6GB/s.
The card also integrates two Dual Link DVI Connectors and Boot Camp Support for access to native Quadro GPU accelerated professional 3D graphics on Windows.
The Nvidia Quadro FX 4800 GPU for Mac lists for $1,799 and will be available in May 2009 through Apple.com, and select Apple resellers and workstation integrators. The card will also be available from PNY Technologies, Leadteck, and Elsa (Japan).
Updated at 3:50 p.m. PST: correcting for Intel GN40 graphics support and adding pricing information for target market.
Acer launched a PC Tuesday that attempts to bring PC-class performance to Atom-processor-based PCs.
The Acer AspireRevo, about the size of a hardcover book, combines Nvidia graphics with the Intel Atom processor.
(Credit: Acer)The Acer AspireRevo is the first Atom-based PC from a major PC supplier to use Nvidia's Ion chipset that packs GeForce 9400M graphics, the same graphics used in the Apple 13-inch MacBook and MacBook Air.
By design, Atom is a more power frugal and, concomitantly, slower processor than Intel's mainstream Core 2 chip architecture.
The AspireRevo's marquee external feature is the diminutive size: the desktop is comparable in size to a laptop (though slightly thicker, about the size of a typical hardcover book). Internally, the device will test Nvidia's thesis that devices, such as Netbooks, that pair the Atom processor with Nvidia graphics offer much better performance than Intel-only (i.e., Atom-with-Intel-chipset) platforms.
This won't be quite the slam dunk that it was before, however. Intel recently started shipping the Atom N280 and the accompanying GN40 chipset, which for the first time on an Intel Netbook platform delivers 1080p HD playback.
"The AspireRevo...is perfectly suited for the living room, because Nvidia Ion provides a brilliant graphics experience with digital photos, watching video, and playing family-friendly games," said Gianpiero Morbello, corporate vice president of marketing for Acer, in a statement.
Nvidia listed the following capabilities for the Ion-based AspireRevo:
- Ability to run Windows Vista Home Premium
- 1080p HD video with true-fidelity 7.1 audio
- Popular games including Spore, Call of Duty 4, and Sim City 4 *
- DirectX 10 graphics with advanced digital display connectivity
- Accelerated video enhancement and transcoding using Nvidia CUDA technology
(* Correction: originally listed as "Sim City 5" )
Pricing information was not immediately available. Generally speaking, Ion-based desktops are expected to be priced under $300.
Updated at 10:45 p.m. PST with additional system specifications.
The aesthete buys an Apple. This dig in the latest Mac-attack Microsoft ad contains a kernel of truth.
Here's the essential choice: A Dell with a pedestrian design but all the fixin's or a gorgeous Apple MacBook that doesn't offer quite as much. (Whether the prospective buyer needs a maxed-out laptop is a pertinent question too.)
The Dell paradigm is how many people define practicality, i.e., you get more box for the money. Hewlett-Packard of course falls into this category too.
I use both a MacBook (an Air) and a Windows machine (HP): a dualism of sorts: one pleases the eye, the other is more utilitarian. Of course, this characterization of the two platforms is greatly oversimplified (dare I not mention the dueling OSes: OS X Leopard versus XP/Vista?), but this is the kind of thinking that drives many purchases.
Without further ado, let's do a side-by-side.
Aluminum 13-inch MacBook
(Credit: Apple)Aluminum 13-inch (LED) MacBook:
- OS: OS X Leopard
- Processor: 2.4GHz Core 2 Duo
- Graphics: Nvidia GeForce 9400M
- Memory: 2GB DDR3
- Hard drive: 250GB 5400rpm
- Camera: built-in camera
- Connectivity:10/100/1000 Ethernet / 802.11n
- Optical drive: 8x (DVD±RW)
- Warranty: 1 year
- Price: $1,599
Dell XPS 13
(Credit: Dell)Dell XPS 13 (LED):
- OS: Windows Vista Home Premium
- Processor: 2.53GHz Core 2 Duo
- Graphics: Nvidia GeForce 9500M--256MB
- Memory: 4GB DDR3
- Hard drive: 500GB 7200rpm
- Camera: built-in camera
- Connectivity: 10/100/1000 Ethernet / 802.11n
- Optical drive: 8x (DVD±RW)
- Warranty: 2 years
- Price: $1,598
A quick glance at the features shows that the Dell beats the Apple. That said, the Dell isn't an aluminum unibody design, doesn't wow like the MacBook, and doesn't carry the cachet of the Apple brand. The latter two intangibles are important for a lot of buyers.
Perceived performance is also an intangible. The question of which of two comparable systems is faster is often based on one's individual definition of performance.
So, which computer carries the day? I'll let the reader decide.
Additional notes: Some readers say the OS plays a very large role in the buying decision. Particularly the fact that the Apple OS is a Unix derivative and that Apple users can run both OS X and Windows via Boot Camp. Duly noted.
