Latest research into the computer graphics industry shows Intel remains the dominant player, garnering most of the market share for the computer graphics sector in the second quarter.

Intel took a commanding lead over the competition with 40.3 percent of the graphics market in the second quarter of 2006, according to a report by Jon Peddie Research, a graphics consultancy firm

ATI Technologies, recently acquired by Advanced Micro Devices, comes in a distant second, seeing shipments decline 8.4 percent to 27.6. Third-ranked Nvidia was the only company to see shipments increase, growing 2.0 percent sequentially to 20.3 percent.

The report also shows a decline in unit shipment for the second quarter across the board. 71.4 million PC graphics devices were shipped from the major suppliers, which is 4.6 percent down from the prior quarter, though 16.6 percent up year-over-year.

Specifially, the desktop graphics segment saw shipments fall 7.0 percent from the first quarter, but rise 11.6 percent year-over-year. Integrated desktop shipments, Intel's strong-hold, dropped 7.1 percent sequentially but increased 14.7 percent year-over-year. Discrete desktop shipments, the area where ATI and Nvidia typcially dominate, fell 6.8 percent on a quarterly basis and grew 7.0 percent year-over-year.

The mobile graphics segment did better, with quarterly shipments up 2.2 percent sequentially and 31.9 percent year-over year. Intel led the mobile graphics market again with a 54.9 percent share, followed by ATI with 31 percent and Nvidia with 10.9 percent.

In the discrete mobile segment, ATI saw shipments decline quarter-to-quarter while Nvidia saw shipments increase sequentially.

Graphics chips are in every personal computer. They feed information from the computer to the external display, driving monitors, projectors, and any other visual devices. Some advanced graphics chips feature advanced 3-dimensional funtionality to draw complex images - ideal for games and computer aided design.

JPR estimates that a record 19.6 million mobile graphics devices shipped in Q2 06, 14.7 million of which were integrated chip sets for notebooks.