A recent report from Jon Peddie Research (JPR) market tracking company indicated that the total available market (TAM) of standalone graphics cards increased to a record height in Q3 2007 along with revenues. Still, average selling price (ASP) per card faced tangible sequential drop.

Nowadays the market of add-in graphics boards is relatively small due to a number of reasons: graphics cores inside chipsets have become so advanced that many customers do not need a discrete graphics solution; notebooks, the fastest growing PC category, often rely on built-in graphics adapters due to their lower power consumption. For example, of 97.85 million graphics adapters shipped in the third quarter of 2007 only 25.74 million were discrete graphics cards (among 72 million desktop graphics adapters). But even the eroding market can show huge improvements, latest figures from Jon Peddie Research claim.

The whole discrete TAM improved 18.7% year-over-year to 25.74 million of units, whereas revenues increased 33% annually. Still, average selling price per card dropped 6.5% to $257 per unit.

The uptick of the discrete graphics processor market should be attributed primarily to Microsoft Windows Vista introduction as well as Microsoft DirectX 10 introduction in late January, 2007. The result was apparent already in Q2 2007, when average selling prices of graphics cards increased to a record level and as both ATI, graphics product group of Advanced Micro Devices, and Nvidia Corp. ramped up their mainstream DirectX 10-compatible products, volumes of standalone graphics boards reached record level in several years.

“Revenue outpacing units contradicts the typical trend we tend see in semiconductor-driven markets, where as products mature, ASPs moderate or drop, thereby driving up volume. But in the inverse case of Q3, JPR credits the larger gains in revenue to a volume shift up toward more lucrative price bands, as Nvidia in particular saw more demand for its latest generation of high-end performance, enthusiast and workstation class product,” a statement by Jon Peddie Research reads.