Three of the largest computer graphics manufacturers were pitted in intense competition through the first quarter of 2006, however latest data indicates that Nvidia Corp. rose above its rivals in the lucrative discrete graphics segment.

Santa Clara Calif.-based Nvidia managed to increase its share of discrete desktop shipments to 53 percent for the first quarter of 2006, representing an increase of 1.5 percent over the fourth quarter of 2005, according to Jon Peddie Research.

Discrete desktop graphics are typically reserved for gamers and enthusiast, requiring consumers to purchase and install new hardware themselves. Nvidia has dominated this category for four consecutive quarters, the firm said, however its closest competitor, ATI Technologies, has been able to regain lost ground.

ATI and Nvidia continued to dominate the desktop GPU market in the second quarter, but with a shift in relative positions, said Lisa Epstein, a senior analyst at Jon Peddie Research.

With the launch of its flagship Radeon 1900 series [from ATI] and improvements in segments, ATI was able to regain lost segment share in Q2’06, she continued.

Discrete graphics are more costly and generate more revenue per-unit for companies, however it only represents 28 percent of all desktop graphics hardware sold - the rest being represented by integrated graphics.

Taking discrete and integrated products together, Intel again led with 34.1 percent of the desktop graphics market, ATI held 26.1 precent, and Nvidia followed with 23.3 percent market share.

Graphics chips are required in every personal-computer, driving external displays and other visual devices. Some advanced graphics chips, typically shipped as discrete products, feature advanced 3-dimensional processing to draw complex images - ideal for games and computer aided design.

Jon Peddie Research estimates that approximately 74.9 million PC graphics devices shipped from major suppliers in Q1'06, a 5.7 percent decline from the prior quarter and a 24.5 percent.