Despite rising costs and a strategic shift by manufacturers like Nvidia towards the lucrative AI market, consumer graphics card sales have seen a significant surge. A recent report from John Peddie Research indicates that 12.5 million graphics cards, also known as add-in boards (AIBs), were shipped in the last quarter, representing a 10% increase from the previous quarter.
Nvidia continues to dominate the consumer GPU market, holding a substantial 90% share of the AIB market. AMD holds 8%, and Intel has 2%. An add-in board broadly refers to any component that plugs into a PC to enhance performance, with GPUs being a prime example, distinct from integrated graphics found in devices like laptops.
The report also notes a considerable increase in the adoption of AIBs alongside desktop PCs, with the likelihood of a buyer opting for one rising to 89%, a 23% quarter-over-quarter jump. This trend is particularly surprising given the elevated prices of high-end GPUs. Dr. Jon Peddie, the namesake of the research firm, described the continued spike in high-end GPU sales amid rising prices as "defying common wisdom."
While the report does not specify which particular cards are driving sales, it is possible that some consumers are opting for older, more affordable models. However, prior consumer sentiment surveys suggest a willingness to invest heavily in graphics hardware, with a significant percentage of respondents indicating they would spend over $600, and nearly a fifth willing to spend over $1000 on a graphics card.
This increase in GPU shipments contrasts sharply with the performance of desktop PC CPU shipments, which experienced a decline. With 14 million units shipped, CPUs saw a 10.5% quarter-over-quarter drop and a 33% decrease year-to-year.
Dr. Peddie suggests that geopolitical events may be influencing consumer purchasing decisions. He theorizes that consumers may be rushing to acquire AIBs before prices potentially escalate further, citing the ongoing war in Iran and its impact on global supply chains. The crisis in the Strait of Hormuz, which has been affecting component availability since February, is driving up prices across various market segments and could be a contributing factor to the surge in GPU purchases as consumers seek to make acquisitions before potential further price increases.