The integrated graphics chip market will be as dead as dodo by 2012 according to a report by Jon Peddie Research.

In a report with the imaginative title "Integrated graphics chip market to disappear by 2012" the analyst outfit said that the popular integrated graphics processor chipset will depart this planet after 2012.

The report said that the end of the market which was served by integrated graphics chips will see them replaced by "embedded" graphics built into the same chip package. Later they will be just added onto the same piece of silicon as the main processor.

Later this year Intel will bring out a 32-nanometer mobile processor code-named Arrandale that integrates graphics silicon into the same chip package as the main processor, or CPU and this will herald the beginning of the end. AMD wants to "fuse" the CPU and GPU probably sometime in 2011.

Between 2010 and 2012 all we will see are traditional discrete GPUs mounted on add-in boards and/or the motherboard, integrated graphics processor chipsets, and processors with embedded graphics. One or more of these devices will be employed in PCs.