ATI moves to head of class in graphics

The chipmaker accounted for more than half the world's shipments of stand-alone, or discrete, graphics chips during 2004, ATI said Thursday in a statement, citing market share figures from Mercury Research.

"ATI already had a majority share of the notebook market, and it greatly expanded its presence in the desktop market in 2004," said Dean McCarron, principal analyst at Mercury Research. "The net effect was (ATI) shipped the majority of stand-alone graphics chips" in 2004.

The PC graphics market boils down to two major categories. Overall, Intel is the dominant player. The chipmaker builds graphics processors into its PC chipsets, which are groups of chips responsible for routing data inside a PC. Because of the huge number of chipsets it sells with the built-in graphics, Intel shipped the overall greatest number of PC graphics processors in 2004, McCarron said.

ATI, Nvidia, and a host of others, including Via Technologies and Silicon Integrated Systems, also sell chipsets with built-in graphics.

However, when it comes to stand-alone graphics chips, the other main category in PC graphics, ATI had the greatest number of shipments, according to Mercury Research. Stand-alone chips for desktops and notebooks are either soldered directly to a PC's motherboard or paired with memory on an add-in graphics card. Intel does not sell stand-alone graphics chips, leaving that market to ATI, Nvidia, and several other smaller companies, such as XGI Technology.

McCarron, who declined to provide exact figures from the Mercury Research report, said ATI finished 2004 by a small margin ahead of Nvidia, which shipped the most stand-alone graphics chips in 2003.

Although the gap between ATI's and Nvidia's stand-alone graphics chip shipments in 2004 was statistically small, it does mark a major accomplishment for ATI, in general, and for its desktop PC graphics chip business, in particular, McCarron said.

A source familiar with Mercury Research's report said it showed Intel leading the overall market in the fourth quarter with 40 percent of graphics chip shipments.

The source did not have the year-end figures for 2004 from the report.

The report showed ATI in second place, with 27 percent of fourth-quarter shipments, and Nvidia in third, with 18 percent, the source said.

When measuring fourth-quarter shipments of only stand-alone graphics chips, ATI was first, with 55 percent of the market, and Nvidia was second, with 41 percent, the source said the report showed.

McCarron declined to comment on the numbers.