Graphics chip makers Nvidia, AMD/ATI and Intel are feeling the economic pinch, with fourth-quarter sales plummeting from Q4 2007, according to Jon Peddie Research.

"Everyone in the market suffered reduced shipments - some suffered more than others," the research firm said, attributing the sharp slowdown to a drop in consumer spending.

Overall, graphics chip shipments during the fourth quarter dropped 28 percent to 72.4m units, compared to shipments of 100.5m units during the same period last year. Of the big three graphics vendors - Intel, Nvidia and AMD - Nvidia saw the biggest drop in shipments, falling by 34.3 percent, it said.

AMD's shipments slipped by 23.8 percent while Intel, which produces integrated graphics chipsets instead of the high-end parts produced by Nvidia and AMD, saw its shipments fall 20.9 percent.

While the short-term outlook remains grim, Jon Peddie Research said there is a light at the end of the tunnel.

"We're forecasting a strong Q3 and Q4 for 2009 and bracing for what will probably be the worst Q1 and Q2 decline we've seen since the Internet bubble pop of 2000," it said.

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