Intel Arc Eats into AMD Radeon GPU Market Share

Intel Arc has made substantial inroads into the GPU market at the expense of AMD, suggesting that Intel’s bet on the budget side of the discrete GPU market is paying off. This twist was one of the few bright spots in GPU market research firm Jon Peddie Research’s latest reportLooking ahead, the overall GPU market – including integrated graphics – is forecast to have a compound annual growth rate of only 0.19% from 2022 to 2026.

Market Share – with Some Caveats
Intel finished Q4 2022 with an estimated 9% of dedicated desktop GPU shipments, matching AMD’s market share. Nvidia maintained its stranglehold on the segment with 82% market share. It's a significant milestone given Intel's tardy return to the discrete GPU market. If you’re Intel, this is confirmation that focusing Arc on budget gamers – not premium or enthusiast customers – was the best decision. There are some asterisks, however, on top of the obvious caveat that shipments are not sales.

  • A Happy Accident: That Intel Arc targeted budget gamers was partly the result of underwhelming performance.
    • Selling Arc at “budget gaming” prices also lost Intel hundreds of millions of dollars.
  • Going Overseas: Many of Intel’s shipments were in overseas markets that are less competitive than the US or European markets.
AMD in Intel’s Crosshairs
Shipment numbers don’t tell the full story. For example, Nvidia and AMD have both lagged in launching affordable, non-enthusiast video cards this generation. If Intel Arc continues to improve on the software side and aggressively price its GPUs, AMD has a real challenge on its hands. The Red Team may find itself battling Intel in the budget and mainstream space while it struggles on the high-end against Nvidia.

Notebooks Feel the Most Pain
Total GPU shipments – which includes integrated graphics – fell 38% YoY in Q4. Notebooks performed the worst, with a precipitous 43% drop in GPU shipments, almost double the 24% slump for desktop graphics. The small silver lining here is that these figures are more a reflection of the health of the PC market, rather than of the gaming segment specifically. 

Console Figures Offer Some Hope
Gaming companies in the PC space can take a little solace in the global console market's performance. Total revenue dropped 7.8% YoY to 56.2%, with console hardware sales "only" down 10% to $17.6 billion, according to Ampere Analysis, with Piers Harding-Rolls partly attributed this decline to insufficient supply of consoles. This context suggests that even as PC sales stay depressed, gaming will be more resilient. Additionally, subscription services were the only segment to see growth (5.6%) in 2022. This represents an opportunity in the PC space that has yet to be fully tapped into.

Featured Image: Intel