Sales on graphics cards have fallen in recent quarters, affecting both Advanced Micro Devices (NASDAQ: AMD) and NVIDIA (NASDAQ: NVDA).
According to Jon Peddie Research, there was a fall in GPU sales in the third quarter of 2018 (the last quarter for which data is available).
Η NVIDIA, however, is an exception. Its market share increased in the third quarter of 2018, conquering 74,3% of the market and leaving AMD with the remaining 25,7%, according to Jon Peddie Research.
This is not good for AMD if we think that in the second quarter of last year it was over 36% of the GPU market. Investors believe that NVIDIA could stop dominating the graphics card market this year, but that is not the case. However, AMD has taken some action to overcome NVIDIA.
AMD made a spectacular entry into the GPU space, launching the world's first 7nm gaming card in January. The Radeon VII graphics card is 29% more powerful in terms of gaming performance than the previous flagship card. Most importantly, the new GPU does not consume more power to have this performance.
Currently, this GPU is not a direct competitor of NVIDIA's current RTX 2080 Ti card. However, it competes well with RTX 2080. His data Digital Trends suggest that AMD's bid can very well overcome the RTX 2080 in some tests, but also prove it is just as good as the NVIDIA's top card. In fact, Radeon VII has overtaken RTX 2080 Ti after running games such as Battlefield V and Civilization VI.
This is really impressive as the AMD graphics card costs 699 $, while RTX 2080 Ti costs 1.199 $. The most direct competitor, RTX 2080, costs 799 $, so AMD plays intelligently by offering a more powerful card at a lower price.
Of course, the AMD card has some drawbacks. For example, it consumes about 20% more energy than RTX 2080. In addition, NVIDIA's offering includes new technologies such as ray scanning. But the AMD card offers faster speed at a lower price thanks to the new specifications and an advanced manufacturing process. In addition, ray detection is not an obstacle for most players, as there are not many games that support this technology yet.
On the other hand, NVIDIA has difficulty changing its high card prices. The administration has recently admitted that gamers are probably expecting cards at lower prices and AMD would probably benefit from this situation with Radeon VII's release.
AMD's big plan
AMD's CTO, Mark Papermaster, said the company would update its 2019 card line using 7nm. This means we can expect the company to release 7nm GPUs at various prices, giving gamers access to powerful cards based on an advanced manufacturing process while being economical.
NVIDIA is expected to release its own 7nm GPU sometime next year. Sales of the latest NVIDIA graphics cards - such as the RTX 2070 and the RTX 2080 - have been disappointing, reducing the company's revenue.
AMD is doing better than NVIDIA, as revenue has increased recently. With this in mind, it will not be surprising if AMD maintains this advantage and boosts its market share as its powerful and cost-effective graphics cards can attract more gamers.