The graphics card add-in-board market fell 0.8 per cent year-on-year in Q2 2016, and 20.8 per cent quarter-on-quarter.
AMD gained market share during the quarter, reported analyst Jon Peddie Research (JPR).
"The news for the quarter was encouraging and seasonally understandable," JPR said in a statement.
"AIB shipments during the quarter decreased from the last quarter by 20.8 per cent, which is below the ten-year average of 9.7 per cent. On a year-to-year basis, we found that total AIB shipments during the quarter rose 0.8 per cent, which is greater than desktop PCs, which fell 0.2 per cent.
"However, in spite of the overall PC churn, somewhat due to tablets and embedded graphics, the PC gaming momentum continues to build and is the bright spot in the AIB market.
"The overall GPU shipments (integrated and discrete) is greater than desktop PC shipments due double-attach-the adding of a second (or third) AIB to a system with integrated processor graphics-and to a lesser extent, dual AIBs in performance desktop machines using either AMD's Crossfire or Nvidia's SLI technology Improved attach rate.
"The attach rate of AIBs to desktop PCs has declined from a high of 63 per cent in Q1 2008 to 34 per cent this quarter, a decrease of 22.7 per cent from last quarter which was negative. Compared to this quarter last year it increased one per cent, which was low."
AIBs using discrete GPUs are found in desktop PCs, workstations, servers and other devices such as scientific instruments. They are sold directly to customers as aftermarket products, or are factory installed by OEMs.
In terms of overall GPU shipments, AMD market share increased 0.4 per cent from last quarter and 2.8 per cent from last year, Intel increase market share 2.4 per cent from last quarter, and Nvidia overall share decreased 2.8 per cent from last quarter.
Overall GPU shipments (rounded up) decreased four per cent from last quarter, AMD decreased one per cent, Nvidia decreased 20 per cent and Intel decreased one per cent.
Year-on-year total GPU shipments decreased 10 per cent, desktop graphics decreased six per cent and notebooks decreased 12 per cent.
JPR's full report is available at www.jonpeddie.com.