ATI chipset shipments climb 486% on Intel deal

Chicago (IL) - Intel’s move to convert some 130 nm fabs to 90 nm units in order to transition its chipsets to smaller silicon structures has caused a significant shift in global chipset market shares. The temporary drop in chipset production capacity, which is expected to last through Q2 of this year, forced Intel to give up double-digit market shares, while others were able to benefit from the shortage in Intel chipsets.

According to Mercury Research findings, Intel’s chipset market declined from 69% in Q1 of 2005 to 57% in the same quarter 2006. Despite limited capacity and a loss of market share, Intel was still able to increase its overall production volume from 35.5 million to 38.6 million units. The main beneficiary of this situation was ATI, which has been contracted by Intel to supply Xpress 200 chipsets for its entry-level motherboards. The firm’s shipments surged 486% from 1.4 million to 8.2 million chipsets ; the market share increased from 3 to 12%.

Nvidia also experience a sharp increase in chipset shipments. While the company did not profit from the Intel-shortage, the firm saw dramatically increasing demand for AMD-targeted units. Overall shipments jumped 91% from 3.2 million in Q1 of 2005 to 6.1 million in Q1 of 2006 ; market share increased from 6 to 9%.

Via, the world’s second largest chipset manufacturer, maintained its 15% market share and was able to grow its shipments from 7.5 million to 10.1 million units. The firm more than doubled its shipments into Pentium 4- and AMD Opteron/Athlon 64-based systems, but dropped EV6 bus shipments dramatically from 3 million to about 250,000.

Intel previously announced that agreements reached with third-party chipset suppliers were of temporary nature. The company intends to take back those market shares as soon as its 90 nm fabs are able to meet market demand, chief financial officer Andy Bryant said in a briefing with analysts in November of last year.