Monday, October 17th 2022
PC Graphics Market on Track for Post-pandemic Correction
Jon Peddie Research (JPR) has responded to the recent dramatic reports by Canalys, Gartner, and IDC showing a precipitous drop in Q3 2022 PC shipments. In addition, JPR is providing guidance on the impact to graphics chip and AIB shipments. Jon Peddie, president and founder of JPR, said, "Our advice to clients has been consistent since 2020: The pandemic boom was not a surge in demand brought about by real growth in the market. The PC market is now correcting itself after a period of extraordinary growth spurred on by spending from an overwhelming surge of users working from home."
Peddie continued, "People were forced to work at home in 2020 and 2021, and many needed equipment. As a result, PC sales surged. Those people have what they need, and some of them are going back to the office. They don't need new PCs, and won't for three to five years. So, we are back to the nominal growth of the PC market, which was, and will be again after two quarters' adjustment, tracking GNP growth."
Supply chain disruptions have now eased, but high inventory is a problem. In addition, TSMC is expected to see its fab capacity utilization trending downward in the next six months as order cuts by fabless clients begin to take a toll on the foundry.
Finally, the AIB market was also buffeted by a surge in late 2021 from crypto miners. This period of readjustment is expected to have a short-term impact on the irrational exuberance of the pandemic buying era. However, it does not indicate anything other than the end of an anomaly in sales, meaning the market is resilient and well-positioned to remain strong going forward.
Source:
Jon Peddie Research
Peddie continued, "People were forced to work at home in 2020 and 2021, and many needed equipment. As a result, PC sales surged. Those people have what they need, and some of them are going back to the office. They don't need new PCs, and won't for three to five years. So, we are back to the nominal growth of the PC market, which was, and will be again after two quarters' adjustment, tracking GNP growth."
Finally, the AIB market was also buffeted by a surge in late 2021 from crypto miners. This period of readjustment is expected to have a short-term impact on the irrational exuberance of the pandemic buying era. However, it does not indicate anything other than the end of an anomaly in sales, meaning the market is resilient and well-positioned to remain strong going forward.
57 Comments on PC Graphics Market on Track for Post-pandemic Correction
People with a 3080 will most likely stay with a 3080 for more than two year. Just like most with an iphone 13 are not really going to change for a 14 unless there are really breakthrough innovations.
If the 4080 16GB was 800-900$ that would be another story..
And ethereum merging has nothing to do with pandemic, it's indeed time to adjust to a more down to earth business plan
However, the ETH merge does have a material effect on GPU demand.
?? Not. ??
The PC market is now correcting itself after a period of extraordinary growth spurred on by spending from an overwhelming surge of users working from home."
Surge of crypto they mean. ;)
Ideally, both are true, but I suspect there will still be a small market for $2000 GPUs just as there's a market for $1200 motherboards and $1800 smartphones. Hopefully at least it means an increase in performance/$ for the median buyer, who is interested in something $200-300.
There are professional users: scientists, researchers, architects, even developers working on some future gaming title to be released on PS5/XBox/PC/Switch, whatever.
There is more growth potential in Datacenter/HPC anyhow and NVIDIA wisely earmarks their best silicon for those customers.
One was pandemic driven work-from-home demand for PC hardware not just discrete graphics cards but things like monitors, webcams, keyboards, etc.
The second was increased gaming activity due to pandemic shelter-in-place mandates and consumers have less options for their entertainment. The gaming industry reflected this in increased time spent on gaming and revenue increases (titles, subscriptions, etc.). Muddying the waters both Sony and Microsoft launched new console platforms during the first year of the pandemic.
The third was crypto mining. That mostly affected GPU sales. Remember that mining rigs often have multiple GPUs so there's no directly proportional increase in CPUs, monitors, keyboard, mice, etc. It's also important to remember that the entire crypto market crashed, not just Ethereum which was basically the only cryptotoken worth mining on standard PC hardware.
Macroeconomic conditions are far different than three years ago. The market forces have changed, electricity rates skyrocketed.
Whole books could be written about what happened to the computer industry in the past three years, not really realistic to expect that it can be summarized in a handful of sentences.
ie $1.5-2k for a GPU, $300-1.5k for a mobo etc etc....
Someone please wake me up when the "REAL" correction actually starts :D
The USA doesn’t speak for the entire world but from an economic standpoint what happens here is often reflected in what happens elsewhere, even a nice sovereign nation like the Netherlands.
In the past few years consumers have made it crystal clear that they will pay retailers usurious sums for inflated MSRPs or even more outrageous amounts to scalpers.
If no one bought from scalpers prices might actually be reasonable.
Alas…
www.techpowerup.com/299936/amd-cuts-down-ryzen-7000-zen-4-production-as-demand-drops-like-a-rock
If I saw a similar article on Nvidia, that would mean something.
Every computer needs a CPU but not all need discrete GPUs (especially high performance models). Notebooks, corporate PCs, etc. often do fine with integrated graphics or low performance graphics cards.
Crypto mining was really a GPU market influencer, not the CPU market.
If corporate compute demand has dropped I expect Intel to issue a similar warning about lower Raptor Lake forecasts. They are debating layoffs.
- AMD launch just 2 GPUs, for now
- AMD sells their flagship GPU that trades blows @ least in raster with 4090 (if not higher performance) for ... say ... $1000
- AMD lowers the prices of ALL their current line accordingly, so that every tier has their own pricing
How do you think will nVidia respond to that?
It's not like there hasn't been a precedent for this: remember when Zen launched? 8c / 16t @ CPU around half the price of what Intel priced their premium CPU.
Add to that, there are more than enough as well for the AMD inflated prices too.
Until inventory for 6000 series dries up, then release the rest of 7000 series. Although i'm being VERY optimistic with prices.