Jon Peddie Research DYNAMICS IN GPU MARKET Is

Jon Peddie Research DYNAMICS IN GPU MARKET - Is the discrete GPU a dinosaur? 1

Jon Peddie Research Focus and emphasis on Digital Technology, Multi Media, and Graphics Consulting and market research - Advisor to industry leaders and financiers Jon Peddie Research Bi-weekly report, various Digital Technology Market Studies Product testing and benchmarking • The Business of Multimedia and Graphics

Agenda – What the Roadmaps Say The end of the IGP The introduction of the EPG & HPU Jon Peddie Research The end of the discrete GPU? Offsetting factors The big future for discrete GPUs

Jon Peddie Research MARKET DYNAMICS

81 19 82 19 83 19 84 19 85 19 86 19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 19 Jon Peddie Research Strong Market Good Growth 600 $14, 000 500 PCs (M units) DJIA 100 0 $12, 000 Graphics (M units) $10, 000 400 $8, 000 300 $6, 000 200 $4, 000 $2, 000 $0

PC Platforms 350 300 M units 250 Desktop vs. Notebook PC growth Desktop PCs Notebook PCs 200 150 Jon Peddie Research 100 50 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Graphics Chips Desktop vs. Notebook GPU growth 700 600 Total graphics semiconductors M units 500 Desktop Notebook 400 300 Jon Peddie Research 200 100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Jon Peddie Research THE IGP Integrated Graphics Processor

GPU Segments Desktop Jon Peddie Research PC Notebook Discrete IGP

Basic Intel PC Architecture FSB Intel Processor System memory High-speed SDRAM Memory controller North Bridge All that other stuff: USB, CDDVD, HDD, audio, PCI, parallel serial, 1394, keyboard, IR, etc. South Bridge Jon Peddie Research The interface: PCI Express Graphics Processor Unit GPU) VGA, DVI, Display Port Integrated Graphics Processor ( IGP) Unified Memory architecture (UMA)

Jon Peddie Research 100 0 Q 1'04 Q 2'04 Q 3'04 Q 4'04 Q 1'05 Q 2'05 Q 3'05 Q 4'05 Q 1'06 Q 2'06 Q 3'06 Q 4'06 Q 1'07 Q 2'07 Q 3'07 Q 4'07 Q 1'08 Q 2'08 Q 3'08 Q 4'08 Q 1'09 Q 2'09 Q 3'09 Q 4'09 Q 1'10 Q 2'10 Q 3'10 Q 4'10 Q 1'11 Q 2'11 Q 3'11 Q 4'11 Q 1'12 Q 2'12 Q 3'12 Q 4'12 Q 1'13 Q 2'13 Q 3'13 Q 4'13 IGP Shipments Total DT & NB IGP 90 80 70 60 50 40 30 20 10

Jon Peddie Research THE END OF THE IGP Don’t be sad – it’ll be OK

Jon Peddie Research INTRODUCTION OF THE EPG & HPU The Integrated Processor Graphics chip

First Generation Jon Peddie Research The first versions of this new design can be found in Intel’s Clarksdale i 5 processor, a four-core CPU with an IGP in a multichip package. Clarksdale i 5 First EPG

Introducing the EPG Jon Peddie Research The Integrated PROCESSOR Graphics Clarksdale’s graphics are UMA With the memory controller embedded within the CPU there is a tighter coupling and a higher bandwidth capability. Thus Clarksdale has good performance at nominal screen resolutions (i. e. , 1280 x 1024. ) Ivy Bridge will be much better, Haswell even more

Performance of EPG Futuremark Vantage Jon Peddie Research Window 7 64 bit Vista 32 bit * Higher is better AMD 4850 e+780 GX 1045 Intel Quard. Core Q 995+GMA 1408 AMD 945+890 GX 2690 Intel i 5 661 4734 0 2000 4000 6000

Desktop EPG Replaces IGP Desktop Embedded/Integrated Components (M units) 180 160 140 120 100 80 60 40 Jon Peddie Research 20 Desktop EPG, CAGR 2010 -2016: 37. 1% Desktop HPU, CAGR 2010 -2016: 184. 8% Desktop IGP, CAGR 2010 -2016: -100. 0% 2008 0. 0 139. 6 2009 0. 0 150. 5 2010 18. 7 0. 1 133. 4 2011 61. 4 4. 9 92. 0 2012 104. 3 14. 1 27. 4 2013 109. 5 22. 6 3. 4 2014 114. 3 30. 1 0. 0 2015 117. 4 32. 8 0. 0

Notebook EPG Replaces IGP Notebook Embedded/Integrated Components (M units) 400 350 300 250 200 150 100 Jon Peddie Research 50 0 Notebook EPG, CAGR 2010 -2016: 19. 6% Notebook HPU, CAGR 2010 -2016: 74. 3% Notebook IGP, CAGR 2010 -2016: -100. 0% 2008 0. 0 111. 7 2009 0. 0 144. 2 2010 94. 6 4. 8 78. 9 2011 159. 5 32. 4 8. 6 2012 172. 0 48. 6 3. 5 2013 190. 5 61. 8 0. 8 2014 208. 5 85. 4 0. 0 2015 241. 9 107. 6 0. 0

Jon Peddie Research PC Segments Desktop Notebook Workstation (Professional) Enthusiast/Workstation (Gamer/Professional) Enthusiast (Gamer) Desktop Replacement (Enterprise & Consumer) Performance (Multimedia Consumer) Thin & Light (Consumer & Enterprise) Mainstream (Consumer & Enterprise) Ultrathin (Consumer) Value & Nettop (Enterprise & Consumer) Netbook (Consumer)

PC Segments Graphics Desktop Workstation (Professional) Two or more GPUs Jon Peddie Research Enthusiast Discrete GPUs (Gamer) Discrete GPU Notebook Enthusiast/Workstation (Gamer/Professional) Discrete GPUs Discrete Desktop Replacement (Enterprise & Consumer) Performance (Multimedia Consumer) Thin & Light (Consumer & Enterprise) Mainstream (Consumer & Enterprise) CPU with embedded GPU IGP Value & Nettop (Enterprise & Consumer) Ultrathin CPU with embedded GPU (Consumer) IGP Netbook (Consumer)

First Fully Integrated EPG 2 H’ 10 AMD shipped samples of its Fusion Llano processor to its OEMs. A fully integrated HPU fabricated in a 32 nm process Jon Peddie Research It was a 4 core CPU with a 32 or greater core GPU First GPU to be built in SOI. ATI has demonstrated transistor packing getting 1, 600 cores in a 334 mm 2 die

Llano Block Diagram Core 1 Core 2 Core 3 Core 4 512 kb L 2 Cache 1024 kb L 2 Cache 6 MB L 3 Cache System Request Interface Jon Peddie Research Crossbar Switch DDR 3 MC Hyper. Transport I/O

Performance of GPUs Relative performance of GPUs Jon Peddie Research * Higher is better Nvidia GTX 480 AMD Llano Speculated AMD HD 5450 Jon Peddie Research Intel i 5 661 AMD 945+890 GX 0 EPGs will be a real inflection point 50, 000 100, 000

Jon Peddie Research INFLECTION POINT

An Inflection Point The EPG is an inflection point One that has been speculated, and worried about for years Jon Peddie Research – has LSI integration gotten to the point that the discrete GPU will be relegated to a small and declining portion of the market?

Self Perpetuating Jon Peddie Research If that happens, where will the R&D budget come from to develop the next generation of GPUs? The design cycle and cost for a modern GPU is incredible compared to just 10 years ago.

Development Costs Jon Peddie Research To get the ROI for that kind of investment the GPU suppliers have to sell not only high-end chips but also midrange derivative versions. If, however, the midrange is satisfied by the EPG based processors, the ROI will take longer and may never be realized due to obsolesce of functionality.

Time and Cost to Develop $400 4, 500 $350 4, 000 3, 500 $300 Time to develolp (mo) 3, 000 Cost to develop($M) $250 Number of transistors (k) 2, 500 $200 2, 000 $150 $100 1, 000 $50 25 27 33 43 47 36 39 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1994 1999 1993 1998 1992 23 29 31 68 61 65 56 51 500 - 1997 10 17 19 21 1996 8 1995 6 12 14 1991 $0 1990 Jon Peddie Research 1, 500

Costs over time Direct. X Version The “watershed” concept Jon Peddie Research The average life cycle of a GPU roughly follows the introduction of versions of the Direct X API. Windows Version Release Date Direct. X 1. 0 Windows 3. 1 Sept. 1995 Direct. X 2. 0 95 and NT 4. 0 Jun. 1996 Direct. X 3. 0 NT 4. 0 SP 3 Sept. 1996 Direct. X 4. 0 n/a Never released Direct. X 5. 0 98 Jul. 1997 Riva 128 3 D Rage Pro Direct. X 6. 0 98 SE and ME Aug. 1998 Riva TNT Rage 128 GL Direct. X 7. 0 2000 Sept. 1999 GF 256 Radeon Direct. X 8. 0 2000 Nov. 2000 GF 2 Ultra Radeon 8500 Direct. X 8. 1 XP Nov. 2001 Direct. X 9. 0 XP Dec. 2002 GF FX 5800 Radeon 9700 Pro Direct. X 9. 0 a XP Mar. 2003 Direct. X 9. 0 b XP Aug. 2003 Radeon X 800 Direct. X 9. 0 c XP Aug. 2004 GF 6800 Direct. X 9. 0 c XP Aug. 2005 GF 7800 Radeon x 1300 -1900 Direct. X 10 Vista Nov. 2006 GF 8800 Direct. X 10. 1 Vista SP 1 Nov. 2007 Radeon HD 2900 Direct. X 10. 1 Vista SP 1 Feb. 2008 GTX 200 Radeon HD 4800 Direct. X 11 Windows 7 Oct. 2009 Radeon HD 5800 Direct. X 11 Windows 7 Oct. 2010 GTX 480 Direct. X 11. 1 Windows 7 Mar 2012 GTX 680 Radeon 7970

Other Concerns Jon Peddie Research As the IGP gained unit market share the investors and press extrapolated the line to predict when all PCs would be IGP based.

IGP and GPU Shipments Discrete and Integrated Graphics (M Units WW) 700 600 500 400 Market share of d. GPUs in Consumer & SMB PCs 300 200 100% 100 0 2008 2009 2010 2011 2012 2013 90% 2014 80% 2015 Discrete GPU, CAGR 2010 -2015: 96. 51 88. 62 81. 50 110. 47 111. 26 129. 15 138. 2470% 142. 40 11. 81% 60% IGP, CAGR 2010 -2015: -100% 251. 30 294. 73 212. 39 100. 61 30. 81 4. 26 0. 04 50% HPU & EPG, CAGR 2010 -2015: 118. 10 258. 19 338. 91 384. 35 438. 33 499. 76 33. 45% 40% 30% Jon Peddie Research 20% 10% 0% 2008 2009 2010 Total d. GPU less Enterprise, 88. 16 81. 69 71. 92 CAGR 2010 -2015: 12. 41% Functional IGP, CAGR 201092. 81 104. 45 100. 87 2015: -100% Functional EPG & HPU, CAGR 0. 00 43. 23 2010 -2015: 36. 90% 2011 2012 2013 2014 2015 100. 26 100. 13 116. 67 125. 17 129. 08 41. 11 15. 93 0. 00 95. 92 143. 36 166. 96 183. 98 207. 90

Beware of Soothsayers It’s a silly model and most forecasters knew it Jon Peddie Research The “smart” ones reasoned that Moore’s law would indeed compensate for performance and that functional integration was inevitable and therefore the discrete GPU was a Dodo. Some of them made bets on the shares of the GPU suppliers accordingly, and even used the recession to “prove” they were right.

Market Share Issues Jon Peddie Research If GPU shipments stay flat, and EPGs grow at the rate of the PC market, GPU unit market share will shrink. And, depending upon GPU ASP and how the ASP for the EPG is calculated, the GPU market value may shrink. That will make investors very nervous.

Jon Peddie Research OFFSETTING FACTORS

Limitations of EPG Jon Peddie Research You can’t build a blivet There is a limit as to how many transistors that can be put into a die There are power envelope limits, package, yield, and heat dissipation limits. You can’t take a 250 watt, 3. 6 billion transistor, 1536 core GK 104 and cram it in with a 77 watt 1. 4 billion transistor Intel Ivy Bridge Core i 7 processor A blivet is ten pounds of stuff in a five pound bag

Jon Peddie Research Software doesn’t stand still If application development stopped Dec 2009 EPG processors would satisfy the needs of 95% of the users. Investors and writers have long seen that as the ultimate conclusion, even before EPGs It wrong!

Jon Peddie Research Software Market Issues Hardware has leapt ahead of software Software development is just as time and money consuming as chip design. An AAA first-person shooter (FSP) game takes 3 -5 years and $5 to $30 million dollars to produce now It’s a risky “hits-based” business Only a few publishers and studios in the market so the output capacity of the industry is limited.

Software Lag Software will continue to improve And use the cycles available to it And stay almost a generation behind HW Jon Peddie Research Occasionally some developers will be in, or almost in sync with the hardware developments.

Jon Peddie Research Chicken vs. Egg The chicken and egg dilemma No one wants to develop for a small installed HW base Some ISVs hold back a new release until either the installed base builds up or a competitor announces a new release. This is extremely frustrating for the hardware suppliers.

Heterogeneous compute Jon Peddie Research It’s here (at last) Support in three OS This is a significant breakthrough in computer science It will have far reaching, long term, and astounding influence on the world. The economy of scale puts a super computer in the hands of everyone for $5, 000 or less.

Jon Peddie Research Could this be the Future? System DRAM CPU Larrabee Co-processor Hi speed links to PCIe Bridge Graphics Processor (GPU) Graphics memory High-speed DDRAM Ray Tracing Or Processor (RTP) South Bridge Audio is the NIC third processor Processor like third rail? (DSP) (FPG)

More FLOPS Less $ Jon Peddie Research Cost per FLOP, the GPU used as a vector processor most economical computing element. The GPU can be used in three major application areas: �scientific, �professional/commercial, and �consumer. Most applications will scale by the number of GPU cores available.

Destroying things – Investment Protection Jon Peddie Research A discrete-based GPU AIB, adds extraordinary impact to a game. It also offers investment protection to the buyer in that it gives added life to his or her purchase.

Hybrid PC Architecture System memory High-speed SDRAM Memory Bus South Bridge Processor Jon Peddie Research GPU Discrete GPU Graphics memory High-speed DDRAM High-speed Links Frame buffer

Scalable Graphics SLI – 2 to 3 AIBs Crossfire – 2 to 4 AIBs Lucid Logix – 2 to 4 AIBs - mixed Estimated scaling Jon Peddie Research 300 Multiple AIBs for: • More performance • Physics • Ray tracing • Investment protection 250 ATI 200 Nvidia Lucid Logix 150 100 1 2 3 4

Jon Peddie Research The more you can see … The more you can do - Peddie’s 2 nd law In Computer Graphics too much is not enough - Peddie’s 1 st law

The big future for discrete GPUs sell 1. 35 to PCs That ratio will increase due to: GPU compute Hybrid Jon Peddie Research Scaling The EPG class products will kill midrange GPUs They can’t come close the high-end

The Market Shift to EPG Total Graphics (M units) by Qtr Jon Peddie Research 180 160 Total DT & NB Discret Total DT & NB IGP Total DT & NB IPG 140 120 100 80 40 Discrete GPUs 20 Q 1'0 8 2' 08 Q 3'0 8 Q 4' 08 Q 1'0 9 Q 2' 09 Q 3'0 9 Q 4' 09 Q 1'1 0 Q 2' 10 Q 3'1 0 Q 4' 10 Q 1'1 1 Q 2' 11 Q 3'1 1 Q 4' 11 Q 1'1 2 Q 2' 12 Q 3'1 2 Q 4' 12 Q 1'1 3 Q 2' 13 Q 3'1 3 Q 4' 13 0 Q Jon Peddie Research 60

Jon Peddie Research Thank you Chasing pixels – finding gems Jon@jonpeddie. com