The Graphics Card Market’s Q4 2024 Surge and Uncertain Future

The global discrete graphics card market for PCs, represented by Add-in Board (AIB) partners, experienced significant growth in Q4 of 2024. According to the latest data, the volume of video card shipments reached 8.4 million units, a significant increase compared to previous periods.

At the same time, shipments of desktop processors also increased, reaching 22.5 million units. The overall increase in shipments of graphics processor units (GPUs) was 6.2%, which is higher than the average over the past 10 years. This growth can be attributed to several factors, including the recovery of supply chains after the pandemic, increased demand for gaming and professional solutions, and a seasonal surge in sales ahead of the holidays.

Despite the positive results in Q4 2024, analysts agree that the long-term outlook for the graphics card market remains weak. The cumulative decline rate of the AIB market is expected to be 4.3% between 2024 and 2028. By the end of this period, the total number will reach 119 million units installed, and the usage rate of discrete graphics accelerators in desktop PCs will be 81%. This decrease is due to several key factors:

Declining demand for desktop PCs: The desktop market continues to shrink in favor of mobile devices and laptops, negatively affecting the demand for discrete graphics cards.

Competition from integrated solutions: Modern processors with integrated graphics are becoming increasingly productive, which makes them sufficient for most everyday tasks, including mid-range games.

The shift towards cloud technologies: The growing popularity of cloud gaming services and remote workstations, which reduces the need for robust on-premises graphics solutions.

Interestingly, broader market trends also reflect uncertainty in the tech sector. Amazon stock price has shown volatility in recent months, influenced by factors such as cloud computing growth, retail demand fluctuations, and competition from emerging AI-driven solutions.

An analysis of the market shares of the leading players shows significant changes in the balance of power. In Q4 2024, AMD's revenue exceeded the estimated by 1.66% and earnings by 0.83%. This achievement is due to the successful launch of new graphics card models, which received positive reviews for their performance and energy efficiency.

Intel's reported revenue also has a surprise of 3.13% with earnings surprise of 9.38%, indicating a gradual strengthening of its position in the discrete graphics market after the release of its Arc line.

Meanwhile, Nvidia stock has decreased by 20% since January. Several reasons can explain this dynamic:

Production constraints: Nvidia has faced difficulties in manufacturing its new chips, leading to market shortages.

Resource reallocation: The company is actively investing in developing graphics processors for AI and high-performance computing tasks, which may negatively affect its presence in the consumer market.

Competition from AMD and Intel: The success of competitors, combined with aggressive pricing policies, also reduced Nvidia's share.

Despite the current growth, the long-term outlook for the graphics card market remains disappointing. In addition to the factors already mentioned, it is worth considering the following trends:

Economic instability: Global economic problems, including inflation and declining consumer spending, may negatively affect demand for expensive components such as graphics cards.

Technological changes: The development of technologies such as quantum computing and specialized accelerators for AI can reduce dependence on traditional GPUs.

Environmental standards: Stricter environmental standards may lead to increased production costs, affecting the final price of products.

The graphics card market showed impressive growth in Q4 2024, but this success will likely be temporary. The long-term outlook remains weak, and major market players such as AMD, Intel, and Nvidia will face serious challenges in the coming years. Success in this market will depend on companies' ability to adapt to changing conditions, invest in new technologies, and offer solutions that meet the needs of both consumers and businesses.

In the face of increasing competition and technological shifts, only companies that can effectively balance innovation and profitability will be able to maintain their market positions.