Integrated Graphics Take on Discrete Dinosaurs? – THG.RU

Who’s afraid of the big bad IGC?

Anyone who knows anything about computer architecture, graphics, market dynamics, silicon fabrication, how to pick stocks, or the current occupant of Grant’s tome, KNOWS that the integrated graphics controller (IGC) and it’s bigger cousin the integrated graphics processor (IGP), IGCs with T&L engines and more powerful graphics, are going to take over the world and not only put the discrete graphics chip suppliers out of business, but to shame as well.

It’s as obvious as Moore’s law that it’s over for the big time graphics guys and that the IGC/IGPs will satisfy the needs of the office and web-browsing, e-mail writing user of the world, who, as everyone KNOWS, constitute the major majority of users representing something close to 99.999-percent. You knew that, didn’t you?

Just in case you didn’t know that, we’ve done the research at JPR, and here’s what we found, and subsequently projected.

IGCs vs. discrete chip shipments

The IGC market for desktops and portable PCs will grow from 29 million units in 2002 to 58.5 million units in 2003, corresponding to a growth rate of over 100% with the portable segment the fastest growing segment of the PC market.

The P4 Bubble

The trend is obvious. Intel spurred this market when they entered it, and when they fell back because they didn’t have an IGC for the P4, the market share of discrete GPUs on add-in boards (AIBs) increased, often referred to as the “P4 bubble.” And then, POP, Intel introduced the “Good Enough Graphics,” (GEG) i845G IGC, or so the common wisdom story goes.

Well the stock market certainly believed it knocked Nvidia’s share price back-three times because of “common knowledge” about the GEG i845G. ATI took a hit or two too, as did VIA and SiS-man, that GEG i845G IGC is some killer part, no? Ah, no, no it’s not.

In fact, in tests conducted by the ODMs and a few OEMs, it has been discovered (but not publicly disclosed0 that the chunking i845 is NGE-not-good-enough. As a result, we have discovered that twenty to thirty-percent of the systems shipped with IGC, Intel’s and everyone else’s, gets an AIB added to them, either by the OEM or as a retrofit by the user.

AIB or IGC or Both

Now how could that be? It’s due to the following reasons:

• Intel is aggressively marketing the 845, and the delta cost for the graphics is about $5. The price of the i845G has been reported as low as $25, and it’s been said they’ve even appeared in the gray market from mobo suppliers who wanted the P4 and not the i845G, but of course that’s all rumors and we wouldn’t believe any of it.
• The IGCs are at best a weak DirectX7 part
• The IGPs are a better DirectX7 part
• Discrete GPUs are DirectX 8.1 going to DirectX 9.
• IGCs and IGPs are made in what’s known as n-1 technology-i.e., the last generation’s process. Therefore, if today’s GPUs are made using a 0.15-micron process, IGC/IGPs are made using a 0.18-micron (or greater) process.
• IGC/IGPs are Unified Memory architectures–UMAs (also called System Memory Architectures-SMAs.). UMA architectures have a limited memory bandwidth, and therefore limited performance. That can’t be helped, part of being a part of a North Bridge. Also, PCs, due to limited front-side buses (FSBs), don’t use the state-of-the-art memory like 333 MHz DDR. AIBs with discrete GPUs use the fastest DDRs available.
• IGC/IGPs have cost constraints (one of the reasons they use a n-1 processes). Cost constraints mean they can’t have a lot of transistors-silicon, despite statements from some uninformed people, is not free. A modern GPU has something north of 70 million transistors (more than a P4), and the next generation will be touching at and/or exceeding 100 million (a P4 has 55 million).

NGE – Not Good Enough

What does “Good-enough graphics mean anyway? No one will tell you this, except me of course, but what it means is crap. Plan and simple. It’s like saying to someone, “Oh, that ripped shirt you’re wearing is good enough.” That insulting. Who are you to tell me what’s good enough for me?

The marketing types say, “For the value ( “cheap”) conscious buyer, an IGC-based system cost-effective graphics performance.” That’s code for, “Hey, Mr. IT manager. Wanna save a couple of bucks? Your users shouldn’t be playing games, watching videos, or surfing the web, they should just be typing memos, and maybe filling cells in a database program, possibly sending some e-mail. You don’t need graphics, you need affordable productivity.”

Then Intel says (when asked why we need a 2.4GHz processor to run Microsoft Office) “For the media-rich experience, today’s users demand the power of a P4. So, to hear Intel tell it, users will play games, watch videos, listen to music, surf the web, and none of that needs graphics, it only needs CPU MHz. Intel obviously hasn’t acknowledged DirectX 7 let alone 8, 8.1, and 9.

With the new APIs, all of the power of the GPU, a true co-processor, is exposed. The host CPU is completely off-loaded of munching graphics. Do the apps take advantage of the new GPU processors and APIs? Do they? Have you used OfficeXP? Have you done any video editing, played any games (I know, I know, you think all we can do is use games as an example-even though it’s a huge market and by the way there will be over 100 games this year that use DirectX8.1), or used any content creation programs, CAD programs, or surfed the web and played with any of the virtual showrooms?

But IGCs and IGPs can’t ignored, the ODMs and OEMs want them for cost cutting reasons and so the suppliers will provide them, including ATI and Nvidia, the masters of the AIB market. As the following chart shows, everyone is in the IGC/IGP market except 3D/Creative Labs and Matrox.

The table also shows IGC/IGPs do not reach into the high-performance sectors, due to the limitations already mentioned.

Finally – No Fear Graphics

So who’s afraid of the big bad IGCs? No one. 3D/Creative Labs and Matrox have no interest in the low-end, and everyone else has a product for that segment. Will Intel dominate the IGC market? No, unless they strong arm the ODMs and/or cut prices to below costs. Every supplier has a superior product performance-wise to Intel’s i845G, and most can meet or beat Intel on price. Will Intel sell a boatload of i845Gs? Does the sun rise in the east? Intel could sell boatloads of chips that didn’t have pins on them its sales and marketing teams are so powerful.

Let’s do some rough math.

• The IGC/IGP segment will take an average of 34-percent of the market.
• The IGC/IGP segment will be shared among six suppliers.
• The IGC/IGP segment has the lowest ASP (average selling price), less than 20% (or more) that of an average to good GPU, and less than 50% (or more) that of a DirectX 8.1 – 9 GPU
• The IGC/IGP has the lowest margins, less than 20%

Does this look like a market segment that’s going to put companies like 3D/Creative Labs, ATI, Matrox, or Nvidia out of business? Not likely.

Is this a market segment that will grow? Absolutely. But, it will not assimilate the high-end until the chip suppliers move their IGPs to the state-of-the-art process, and CPUs move to high-speed front ends like HyperTransport and PCI Express (3GIO) that can take advantage of high-speed (and dual channel) DDR memory. That will take a few years.

And as the IGP market develops most of the current GPU leaders today will be in it. As Pogo (an old cartoon I used to read) once said, “We have met the enemy, and we is him.”