The latest report from the industry analyst firm Jon Peddie Research (JPR) highlights a modest but noteworthy reshuffle in the graphics card market during the final quarter of 2024. AMD has managed to reclaim 7% of the graphics market share, inching up from just 10% in Q3 2024 to a more competitive 17% in Q4. While this increase is a cause for celebration among AMD enthusiasts, the stark reality is that Nvidia still maintains an iron grip on the market, signaling that the battle for supremacy is far from over.
Nvidia’s stronghold remains formidable, and despite AMD’s gains, the company continues to dominate the graphics landscape. With industry-wide concerns about supply limitations and looming tariffs, both companies face unique challenges that will significantly influence their trajectories moving into 2025. The graphic card market has been rocked by the pressures of production constraints from TSMC and heightened demand for AI-capable GPUs, indicating that this is not just a battle between two hardware giants but a reflection of broader market dynamics.
Production Constraints and Tariff Implications
According to JPR, the supply of add-in boards (AIBs) was already outpaced by market demand, creating an environment of scarcity in inventory. This scenario raises questions regarding availability and accessibility of graphics cards to end consumers. More troubling, however, are the potential impacts of existing tariffs on hardware imports. JPR strongly cautions that the implementation of these tariffs could further suppress the overall market, particularly as sectors often see dips in Q2 production cycles.
As JPR astutely notes, we are currently navigating through “one of the most challenging planning and forecasting periods ever.” The existing economic climate, combined with potential tariff effects that could truncate growth, might put additional pressure on both AMD and Nvidia in upcoming quarters. The anticipated decline, fueled by tariffs and the existing inventory backlog, poses risks that neither company can afford to overlook.
The Shift in Market Dynamics
The upswing in AMD’s market share can be attributed not solely to the release of its new RX 9070 and RX 9070 XT cards, but also to Nvidia’s strategic decision to taper off the production and sales of its RTX 40 GPU lineup. This transitional phase left a gap that AMD was able to exploit, albeit temporarily. The lack of new Nvidia products during this critical window has contributed to AMD’s modest resurgence.
Both companies are poised at a crossroads: for Nvidia, the imminent launch of its RTX 50 series stands to either solidify its dominance or rekindle competition. For AMD, the newly-released RX 9070 series represents a crucial opportunity to carve out further market presence, but immediate results reflect that this potential has yet to materialize meaningfully in sales.
Moreover, Intel’s entry into the graphics card ecosystem continues to be a non-factor in the context of competition. With a minimal 1.2% market share after the launch of the Arc B580, it is evident that Intel has yet to find its footing. The anticipated impact of Intel’s Battlemage GPU scheduled for early 2025 remains to be seen, but current trends suggest a struggling start for their graphics division.
Market History: A Tale of Resilience and Decline
To put AMD’s recent performance into historical perspective, it is essential to note that the last time AMD held more market share than Nvidia was back in 2005. They even peaked at 35% market share around mid-2018, only to see a gradual decline that has now reached Q3’s dismal 10%. This long-term trajectory illustrates the tougher competition AMD faces as they aim to reclaim their standing in a landscape dominated by Nvidia.
The momentum shift instigated by new product releases may not be sufficient to signify a complete turnaround for AMD in the long run. The natural ebb and flow of the graphics market is nuanced, shaped by not just internal strategies, but also by external phenomena like tariffs and global supply chain issues. As we await the results of AMD’s latest product launches and Nvidia’s upcoming offerings, the gaming and graphics communities brace themselves for a year of uncertainty, competitive revitalization, and market recalibration.