Among Nvidia’s 3rd-party GPU manufacturers, EVGA is perhaps the most famous. The brand is well known for high-quality RTX and GTX graphics cards with generous consumer policies, as well as power supplies, coolers, and motherboards. The partnership between Nvidia and EVGA, which lasted over two decades, is now over, however, and not only will EVGA stop making Nvidia GPUs, it has no plans on making any GPUs ever again. It’s not a clean breakup either.
In a statement to Gamers Nexus, which broke the news, EVGA stated “this is not a financial decision, it is a principled decision.” EVGA has accused Nvidia of keeping partners out of the loop on future products, cutting GPU prices without warning, and limiting what prices GPUs can be set at. According to an Nvidia staff member who spoke to Gamers Nexus, Nvidia CEO Jensen Huang sometimes wonders “why are these guys [EVGA and other Nvidia partners] making money when they’re not doing much?”
One of the main issues is that Nvidia sells its own Founder’s Edition models for significantly less than models from partners. EVGA reportedly loses hundreds of dollars on each RTX 3080, 3090, and 3090 Ti it sells as it needs to cut prices to remain competitive with Nvidia. That figure only considers manufacturing, however.
Although EVGA says this isn’t a financial decision, finances are certainly at play. Jon Peddie Research noted that the gross margin for Nvidia has continued to increase year after year while the already small margin for GPU partner companies has declined. In its 2022 estimate, Jon Peddie Research believes Nvidia will see about 65% gross margin for its entire business while AIB partners will just see 5%. Declining margins are down to increasing costs for production, R&D, and marketing. According to Jon Peddie Research, making up low margins on volume is no longer appealing.
Gamers Nexus was skeptical of EVGA’s story, however. In its report, host Steve Burke suggest the company was probably ordering too many GPUs during the crypto boom and could have gotten burned by the sudden decline in mining. Burke notes that something similar happened with its RTX 20-series GPUs when the company lost money in the six-digit range.
EVGA CEO Andrew Han might also have personal reasons for ending the partnership. Gamers Nexus says that Han, who is in his 60s and has been CEO since EVGA was founded in 2000, wants to spend more time with his family as he approaches retirement and feels that Nvidia’s allegedly disrespectful attitude is no longer worth the trouble.
Although 78% of EVGA’s revenue is derived from its graphics business, the company says it will continue to operate its other ventures. The company’s next largest venture is power supplies, and while it only makes up 20% of EVGA’s revenue, it has four times the gross margin of its graphics business. Losing the vast majority of its revenue is still problematic, however, though EVGA explicitly denied that there would be any layoffs.
Han also denied he would sell EVGA. The company is apparently in a healthy financial position. Furthermore, the CEO didn’t want to deprecate EVGA’s reputation by selling it to another company that might only be interested in profit.
While EVGA could potentially partner up with AMD or Intel to preserve its AIB GPU business, the company has make it clear that it will not be making any GPUs in the future. Gamers Nexus speculates that EVGA’s CEO might have personal reasons for not wanting to pursue a partnership with Nvidia’s competitors, similar to his personal reasons for terminating the partnership with Nvidia.
As for existing EVGA GPUs, the company confirmed it would honor warranties and RMAs as long as supplies last. Its supply of RTX 30-series cards will run out by the end of the year, however, and it’s not certain how easy it will then be for EVGA to uphold its warranties, whether or not the company is willing.
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