GPU Shipments Soared in Q1 2021, to Nvidia’s Benefit

In news that will surprise no one, GPU sales soared in Q1 2021. Sales defied historic trends and the market’s overall momentum is expected to continue through the back half of the year.

That’s the word from Jon Peddie Research, who found GPU sales were up a whopping 35 percent year-on-year and down just 0.3 percent from Q4 2020. The typical decline in Q1 is 7 percent. AMD shipments were down 1 percent from Q4 2020, Intel shipments were down 1 percent (this reflects laptop sales) and Nvidia shipped 3.9 percent more cards.

The fact that high demand hit in Q1 may explain why GPUs have been so hard to find. It could also explain some of the warnings from various OEMs last winter that things would soon get “even worse.” TSMC and Samsung both work off long lead times and they schedule customers for manufacturing space based on seasonal expectations for when fab lines will be available. If a customer cancels orders, as happened in the automotive industry last year, TSMC sells that capacity to other customers down the line.

There’s no proof this is true. And obviously, AMD and Nvidia both saw additional demand coming before Q4 2020. But higher-than-expected demand, combined with even a nominal restriction in capacity from Q4 2020 to Q1 2021, would make an already bad situation worse. AMD would have had to dedicate more production to meeting demand for the Xbox Series X and PlayStation 5, and may not have had the resources to build RDNA2 GPUs in significant numbers.

We continue to see evidence that AMD is capacity constrained. The company’s GPU share slipped 0.12 percent while Intel fell 0.5 percent. Nvidia was the winner, picking up 0.62 percent market share. The decline in shipments for Intel and AMD likely reflects another point Peddie makes in his report. The GPU attach rate is the percentage of systems that ship out with a discrete GPU rather than an integrated solution. The GPU attach rate increased 4 percent in Q1 2021 compared with Q4 2020 and Nvidia’s gains reflect that idea.

Here’s how all of this breaks down: Nvidia shipped more graphics cards out the door in Q1 2021 compared with Q4 2020, while AMD and Intel didn’t. PC sales fell by more than GPU sales (-4 percent versus -0.3 percent) and shipments of desktop graphics cards rose by 7 percent. Keep in mind that these comparisons include integrated graphics market share and Nvidia has none.

The GPU market is extremely healthy right now, if you define health in terms of the amount of money Nvidia and AMD are raking in. If you’re more concerned with availability, things aren’t great. Right now, GPU shortages are expected to last through 2021.

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