Advanced Micro Devices (NASDAQ: AMD) has been a thorn in the side for Nvidia (NASDAQ: NVDA) over the past couple of years as it has made massive inroads into the latter's bread-and-butter discrete GPU (graphics processing units) business. However, the latest GPU market share numbers indicate that the tables are turning in Nvidia's favor once again, as gamers and performance-focused PC users are flocking to its products because of their superior performance.
Nvidia stamps its authority in GPUs
According to Jon Peddie Research, Nvidia's discrete GPU market share increased to 72.8% during the third quarter of 2017, with AMD commanding the rest. By comparison, Nvidia held 69.7% of this space during the second quarter and 70.2% in the year-ago period, so a 29.5% jump in shipments last quarter has boosted the company's dominance in this space.
By comparison, AMD's shipments increased just 7.6% on a quarter-to-quarter basis, which indicates that the momentum has swung in Nvidia's favor.
Nvidia's GPU shipment growth was superior to Intel's (NASDAQ: INTC) 5% jump. PC shipments increased 10.3% quarter over quarter indicating that Intel was unable to monopolize all of this growth.
PC manufacturers are increasingly deploying Nvidia chips in their offerings in place of Intel's integrated graphics. This has allowed the graphics specialist to increase its total graphics chip market share from 16% last year to 19.3% this year.
All in all, Nvidia is firing on all cylinders in the GPU market as consumers and PC OEMs (original equipment manufacturers) prefer its discrete graphics cards over Intel's integrated chips and AMD's latest Vega GPUs. This isn't surprising as high-end hardware accounts for 43% of the PC gaming market, and this is where Nvidia excels thanks to its technology lead over rivals.
What about the competition?
AMD is Nvidia's only competition in the discrete GPU market, and it was expected to give the latter a run for its money with the recently released Vega line-up. However, it turned out that AMD's Vega graphics cards were not good enough to go up against Nvidia's GeForce cards. In fact, the RX Vega 64 and RX Vega 56 can barely match the performance of the GTX 1080 and GTX 1070 GPUs that Nvidia had launched more than a year ago.
Image Source: NVIDIA
The new AMD cards aren't too cheap either and they consume more power. Consumers, therefore, opted to pay a little more and get the more powerful GPU from Nvidia. The limited availability of AMD's latest graphics cards also meant that they were selling at a premium, further shrinking the gap between AMD and Nvidia.