Graphics giants Nvidia and AMD have lost ground to Intel last quarter, mainly thanks to strong sales of Intel CPU with integrated graphics.

According to Jon Peddie Research Intel controlled more than 60 percent of the graphics market in Q2 and both AMD and Nvidia failed to capitalize on surprisingly healthy market. Despite the fact that demand continue to grow in Q2, contrary to seasonal trends, neither AMD nor Nvidia capitalized on the surge.

The figures paint a rather bleak picture for graphics companies. AMD ended the quarter with a 21.2 percent share, down from 24.7 percent in Q1 and 24.7 percent in Q2 2010. Nvidia did even worse, with a 17.5 percent share compared to 19.9 percent in Q1 and that 21.4 percent last year.

However,  Intel’s share grew to 60.7 percent, up from 54.7 percent in Q1 and 52.9 percent in the second quarter of 2010. Year on year, Intel’s share grew by 14.7 percent, while AMD and Nvidia shed 14.2 percent and 18.4 percent respectively.