Advanced Micro Devices (NASDAQ:AMD) Regained GPU Market Share From Nvidia (NASDAQ:NVDA) In Q3 2015

Khalid Moammer
Posted Sep 16, 2015
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AMD has reportedly been successful in regaining discrete graphics market share from its rival Nvidia in Q3 2015. According to Barron’s the market share gains for AMD have been primarily in the $200 and $400 price points which include the R9 380 and the R9 390X graphics cards. While Nvidia continues to hold its position in the premium high-end at the $500+ segment which includes the GTX 980 Ti and GTX Titan X.
It’s also worth mentioning that as the third fiscal quarter obviously hasn’t ended just yet, so the report naturally does not cover the remaining two final weeks in the on-going September quarter.

After AMD GPU Market Share Hit Rock Bottom In Q2 2015 The Only Way Left Was Up

We reported just a couple of weeks ago that AMD reached the lowest market share figure of discrete graphics card units shipped ever in the history of the Radeon brand last quarter. The company claimed only 18% of all AIB – Add-In-Board – shipments in Q2 2015, down from 38% in the same quarter last year. The 20 point loss cut AMD’s market share by more than half in 12 months, the most significant graphics share loss in the company’s history since the acquisition of ATi – the Canadian GPU chip maker – in 2006.

Barron’s analysis is based on tracking GPU pricing data of different discrete graphics products at various price points / segments over a period of time. The analysis is claimed to be highly accurate and works on the basis that GPU vendors adjust product pricing – usually by cutting prices – based on demand and sell-through to gain market share, maintain market share or minimize market share loss.  The analysis found that prices for AMD’s $200 and $400 GPUs either matched or very slightly exceeded MSRPs. While Nvidia GPUs at the same price points were being sold below MSRPs at large and were often heavily discounted and carried generous – up to $60 – rebate offers.

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Let’s take a step back to quickly digest what happened during the past few months at AMD’s GPU business. In late Q2 early Q3 AMD introduced a new set of products which included the Radeon 300 series and the Fiji powered Radeon R9 Fury X, R9 Fury and R9 Nano discrete graphic cards. The new products were brought to market at the end of the second quarter which meant that they did not contribute to the company’s graphics shipments in Q2 2015 in any tangible way. AMD also took actions – which began in Q4 2014 – to reduce inventory of out-going last generation GPUs in the channel and make way for the graphics refresh. These actions were described by AMD’s CEO Lisa Su as being “largely completed” at the end of the second quarter. This in turn translated to a fewer number of GPUs being shipped by AMD and sold into the channel in Q2 to exhaust the remaining inventory of retired graphics chips. These events contributed to the 4.5 point loss of market share, from 22.5% in Q1 2015 to 18% in Q2 2015.

VendorGPU Share Q2 2015GPU Share Q1 2015GPU Share Q2 2014
AMD18%22.5%38%
Nvidia82%77.5%62%

As AMD’s management of inventory levels and its actions to return the channel to a healthier state approach completion as well as new discrete GPU products begin to sell in larger volumes during Q3 2015, market share bounce back was anticipated. AMD’s less visible progress in regaining share at the premium high-end segment could be explained by the limited supply of the HBM powered Fiji GPU that’s been witnessed as of late, especially with regards to AMD’s $650 Radeon R9 Fury X flagship.

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While AMD’s $550 air cooled Radeon R9 Fury cards continue to be widely available in-stock at both Amazon and Newegg carrying asking prices that match the official MSRPs, the AMD Radeon R9 Fury X has recently become so hard to find that even second hand Fury X cards started to sell at price points that exceed the official $650 MSRP. And because major retailers keep running out of stock, asking prices set by the smaller retailers for new Radeon R9 Fury X graphics adapters have climbed up even higher. With new cards now getting listed for up to $899 on Amazon.com by third party Amazon affiliates, a full $250 over the official MSRP.

The Radeon flagship from the red team has repeatedly gone out of stock in all major US retailers since its official launch two months back. We had also reported previously that a bottleneck in the supply chain of components necessary to manufacture the HBM powered Fiji GPUs, which had contributed to the shortage, had been alleviated.  And just like any new cutting edge technology, supply will continually improve with time. And as the whole ecosystem around High Bandwidth Memory matures, we are less likely to see any serious supply constraints become apparent the further along we are in the lifecycle of the technology. But as demand continues to exert pressure on the limited supply of AMD’s premium high-end discrete GPUs in the meantime, it’s going to be very challenging for the company to realize any significant market share gains in that market segment in the immediate future.

 

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