2006 Graphics

Databeans: Graphics products are found mostly in computer applications and function as processors and controllers for video imaging. Other products are used in compression applications in which data is encoded and decoded using the various standards used in the market. Graphics chip demand is quickly shifting from the computing space where products were mainly found on graphics add-in cards, to the consumer market. This market is transforming fast because today's consumer electronics resemble PCs more then their predecessors. Digital storage, digital displays, and digital audio processing are all found in the latest consumer gadgets available on-line or through traditional retail outlets. Digital television, mobile phones, and handheld video players are just a few of the consumer products that provide long term growth opportunity for the processor engines as well as the supporting graphics chipsets used in digital imaging.

Today's players include market leader Intel with an estimated 36 percent share of the 2005 market and a strong position in the PC chipset field. Intel is followed by ATI with 23 percent share and nVidia with 20 percent share of the $9.5 billion graphics chip industry. That the graphics market, with processors and consumer ASSP revenue added, will be worth $9.2 billion in 2006, with about 640 million units shipped. Growing at 10 percent on average each year, this market should reach $14.6 billion by 2011 providing ample opportunity for market leaders Intel, ATI, and nVidia. Significant findings include - worldwide revenue from graphics chips is expected to grow at a compound annual growth rate of 10 percent from 2006 through 2011. - worldwide revenue from graphics chips was reported at $9.5 billion in 2005. - Pricing for graphics chips is eroding due to higher levels of integration. Unit shipment demand is expected to outpace revenue. 2006 Graphics

Publ 20060116