ASRock Dives Into Why it Lacks NVIDIA GeForce Graphics Cards; Doesn't Rule Out Making Them in the Future

[btarunr]

ASRock, ODM giant Pegatron's retail channel brand, built its reputation over its high cost/performance motherboards, and got into graphics cards rather recently (less than 5 years ago), beginning with AMD Radeon graphics cards, before expanding into Intel Arc GPUs. The company has shown with its high-end AMD Radeon cards that it can design complex custom-design graphics cards with heavy cooling solutions, especially given that AMD Radeon boards tend to have more elaborate power designs than NVIDIA. So then, where are the ASRock GeForce RTX graphics cards? Korean tech publication QuasarZone set to find out from ASRock.

Put simply, ASRock does not rule out making custom design GeForce RTX graphics cards in the future, but says that getting into that market right now, is "challenging." NVIDIA now commands the vast majority of discrete GPU market, and as such most of the top DIY PC retail channel brands (such as ASUS, MSI, GIGABYTE), sell both GeForce and Radeon products. They started making GeForce graphics cards decades ago, and have built market presence over the years. NVIDIA also has a set of board partners that exclusively sell GeForce—such as PNY, Palit-Gainward, Galax-KFA2, and Colorful, which make it all the more tough for ASRock to break in. On the specific question asked by Quasar Zone, here was ASRock's answer (machine translated to English by VideoCardz).

What are your plans for the future product lineup? Are there any plans to include NVIDIA graphics cards?

ASRock: This is quite a challenging question. Companies that have both NVIDIA and AMD are ASUS, GIGABYTE, and MSI. These brands have been in operation for a longer time than us, and back when there were founded, there were not only ATI and NVIDIA, but also Elsa and Voodoo. No one had a monopolistic position at the time. However, as time passed, NVIDIA's market dominance became overwhelming, and a world where the production of NVIDIA VGA became influential emerged. I believe there are complex reasons for this. From the perspective of ASRock, currently producing AMD and Intel VGA, it seems challenging for us to immediately start manufacturing NVIDIA VGA.

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[Ferrum Master]

Who said Pegatron also doesn't make nvidia cards?

 

[Redwoodz]

Well..... EVGA comes to mind. Pretty hard to compete when Nvidia sells it's own Founders Version at a cheaper price than the AIB's can. Why would they even try?

 

[Geofrancis]

Nvidia would ditch all their board partners in a second if they had capacity to make all the cards themselves.

 

[Leiesoldat]

Nvidia would ditch all their board partners in a second if they had capacity to make all the cards themselves.

They easily could but that would mean sacrificing their much more lucrative enterprise business where margins are much better at 10 to 20% compared to the paltry couple of percentage points that is the consumer world. Considering that the H100 card is being sold anywhere from 30k USD to 40k USD, Nvidia's apathy to the consumer market becomes much more clear.

 

[kapone32]

They easily could but that would mean sacrificing their much more lucrative enterprise business where margins are much better at 10 to 20% compared to the paltry couple of percentage points that is the consumer world. Considering that the H100 card is being sold anywhere from 30k USD to 40k USD, Nvidia's apathy to the consumer market becomes much more clear.

Right now Nvidia is making 74% profit margin for their Gaming cards.

 

[Nostras]

This statement is a bit of a nothingburger. Nothing of value was said.
Well, maybe except that they're not ruling this out but I'd argue that this is the default position unless explicitly stated otherwise.

This could've been an e-mail...

 

[Denver]

Right now Nvidia is making 74% profit margin for their Gaming cards.

If this percentage is accurate, 74% is calculated on the price of chips sold to AIBs, who assemble their boards and distribute them to importers and retailers etc... If Nvidia had complete vertical control over this supply chain and applied a mere 30% profit margin to the final product, the total revenue would see a significant increase.

*4090(chip) = U$ 300 x 0,74 = U$ 222
4090 = U$1600 x 0,30 = U$ 480

*Don't expect it to be accurate.

 

[Onasi]

Nvidia would ditch all their board partners in a second if they had capacity to make all the cards themselves.

Technically, NVidia doesn’t make anything themselves, as far as I am aware. FEs are made by contractors, Foxconn and BYD were ones that were often mentioned, at least for Ampere, if I recall. The question is if NV would be willing to pay THEM for more production capacity to fill the AIB volume. Seems like so far they aren’t.

 

[kapone32]

If this percentage is accurate, 74% is calculated on the price of chips sold to AIBs, who assemble their boards and distribute them to importers and retailers etc... If Nvidia had complete vertical control over this supply chain and applied a mere 30% profit margin to the final product, the total revenue would see a significant increase.

*4090(chip) = U$ 300 x 0,74 = U$ 222
4090 = U$1600 x 0,30 = U$ 480

*Don't expect it to be accurate.

Exactly. This could be why EVGA left the GPU market.

 

[Assimilator]

Right now Nvidia is making 74% profit margin for their Gaming cards.

Source?

 

[HairyLobsters]

Exactly. This could be why EVGA left the GPU market.

They essentially killed off their business when they did that. They're just a PSU company now.

 

[kapone32]

Technically, NVidia doesn’t make anything themselves, as far as I am aware. FEs are made by contractors, Foxconn and BYD were ones that were often mentioned, at least for Ampere, if I recall. The question is if NV would be willing to pay THEM for more production capacity to fill the AIB volume. Seems like so far they aren’t.

Source?

Look up the Quarter results from Nvidia. It is right there.

 

[Random_User]

With such toxic atmosphere in Nvidia partnership club, joining it right now is just akin to suicide. This is fine for ASUS, which can swallow the loss relatively easily, due to other branches it has. But others, and especially direct partners that depend on the NVidia orders, since it's their only income source, this is tough game. Except one is confident in complete buyout of the entire card's stock, due to AI bandwagon that uses any cards possible, regardless of quality. Because some of them might end up disassembed and their GPUs desoldered. At this point- yes it doesn't matter, since if the containers of cards, might go straight from the factory doors to the sweatshops doing "custom" abominations.
For consumer market, it seems staying with AMD and epecially intel is much more interesting choice, give the upcoming Battlemage and experience with Arc.

Right now Nvidia is making 74% profit margin for their Gaming cards.

By any means I'm not trying to cling to words or being rude. But how much of these are trully gaming use? If exclude all the gamer/consumer cards that been sold by containers, first to the cryptoming, and later to the AI gang. As well as being used by freelancers, like artists and content creators, etc, instead of much more expensive professional class GPUs.
Considering this, it's nothing more but percentage, that doesn't show the real amount of cards sold in retail consumer market. Hence, the number could be inflated by massive load of top end GPUs/cards like 4090, which still being sold by pallets to AI specific companies (even to PRC) $2K or more.
Thus I recon that the lower class GPUs like 4070/Ti/S and 4060 respectively, have even less impact on these magic margin numbers. Considering the prices for 4090 and so, these lower end cads might barely make any dent in the total %% of profit margins number.

Best regards!

 

[trsttte]

They easily could but that would mean sacrificing their much more lucrative enterprise business where margins are much better at 10 to 20% compared to the paltry couple of percentage points that is the consumer world. Considering that the H100 card is being sold anywhere from 30k USD to 40k USD, Nvidia's apathy to the consumer market becomes much more clear.

The question is if NV would be willing to pay THEM for more production capacity to fill the AIB volume

I thinks it's not about prioritizing business orders or being willing to buy more production capacity - they have no production capacity of their own and contract manufacturers will scale as much as they're payed to do - the thing is this would put everything on nvidia's bucket. What if next years cards sell less, what will they do with a gigantic multi year production contract? What if foxconn or whatever contract manufacturer they choose to go with fails to deliver for whatever reason (incompetence, accident at a factory, whatever)?

Having AIBs willing to take that burden for a tiny piece of their margin (they've been really screwing them over for years now) is a small price to pay for a much more flexible and less risky supply chain.

This is fine for ASUS, which can swallow the loss relatively easily, due to other branches it has

They're not swallowing any loss, if they were they would just drop nvidia like EVGA did. What they're swallowing is a lower margin than they would like (and deserve) because they're such a huge manufacturer of gpus that they can spread the development cost better than a smaller operation like EVGA

 

[Daven]

They easily could but that would mean sacrificing their much more lucrative enterprise business where margins are much better at 10 to 20% compared to the paltry couple of percentage points that is the consumer world. Considering that the H100 card is being sold anywhere from 30k USD to 40k USD, Nvidia's apathy to the consumer market becomes much more clear.

You are thinking about the AIB partner margins. Nvidia makes well over 60% margins on all its chips.

 

[ty_ger]

NVIDIA's profit margins on cores and memory sold to AIBs is great. NVIDIA sells them as a set and the AIB can't pick and choose just one or another. Since the core and memory are the most expensive parts, NVIDIA has huge control over the margin on the final product; since the rest of the components the AIB uses are cheap components with little room for margin. NVIDIA is squeezing the margin out of the AIB's pockets. There's no reason for NVIDIA to avoid the AIB business, instead the AIBs are considering if they want to avoid NVIDIA business. NVIDIA knows it has control and doesn't care if the AIB goes out of business in ten years; instead it just wants to maximize profit.

 

[R-T-B]

Look up the Quarter results from Nvidia. It is right there.

Sounds more like "someone told me it's right there" more than a verified truth.

 

[kapone32]

Sounds more like "someone told me it's right there" more than a verified truth.

I was referencing the article on TPU about Nvidia's latest numbers.

 

[lexluthermiester]

ASRock does not rule out making custom design GeForce RTX graphics cards in the future

Yes please!

Well..... EVGA comes to mind. Pretty hard to compete when Nvidia sells it's own Founders Version at a cheaper price than the AIB's can. Why would they even try?

I think this shouldn't be allowed. It's an unfair advantage..

 

[ty_ger]

Sounds more like "someone told me it's right there" more than a verified truth.

I think it is a verified truth from multiple sources.

Over the past couple years, we have had multiple sources and industry research reports stating that AIBs' profit margin on gaming cards has dropped to the 5-10% range while NVIDIA's profit margin on game cards averages in the 65-70% range.

Like I explained above, NVIDIA controls the profit they make even on AIB cards.

 

[lexluthermiester]

Over the past couple years, we have had multiple sources and industry research reports stating that AIBs' profit margin on gaming cards has dropped to the 5-10% range while NVIDIA's profit margin on game cards averages in the 65-70% range.

I remember reading AIB's make between 16% to 26%. It wouldn't be worth their time & effort for any less than 15%. I believe the part about NVidia, though it's likely more like 45% to 55%, which is absolutely, unacceptably, unfair.

 

[ty_ger]

I remember reading AIB's make between 16% to 26%. It wouldn't be worth their time & effort for any less than 15%. I believe the part about NVidia, though it's likely more like 45% to 55%, which is absolutely, unacceptably, unfair.

Not according to JPR. According to JPR, approximately 6%. And per GN, that's one of the reasons EVGA threw in the towel.

It's always a fuzzy number with lots of caveats and definitions.

Either way, terrible for the AIBs since NVIDIA controls the price of the most expensive components and controls the price of the competing final product.

 

[lexluthermiester]

Not according to JPR. According to JPR, approximately 6%. And per GN, that's one of the reasons EVGA threw in the towel.

It's been a solid 7 years since I read that article. Can't find it either or I would cite it. However, if it's gotten THAT bad, it's understandable why EVGA shut down it's GFX operations...

 

[Dr. Dro]

Well..... EVGA comes to mind. Pretty hard to compete when Nvidia sells it's own Founders Version at a cheaper price than the AIB's can. Why would they even try?

Primarily because Nvidia doesn't sell Founders cards worldwide. In fact, outside of the pampered North American and Western Europe markets, they're just about unobtainable.

It's been a solid 7 years since I read that article. Can't find it either or I would cite it. However, if it's gotten THAT bad, it's understandable why EVGA shut down it's GFX operations...

Something tells me the EVGA issues run far deeper than just "nGreedia bad". For example, their audio card venture simply folded after there was a fire at the Asahi Kasei Microdevices factory that manufactured the DAC and ADC that they used to make them. Instead of changing the design and suppliers, they just withdrew from the market.

I only found that out because I had been looking at upgrading from my original NU Audio (which I must admit, you have to pry it from my cold dead hands, I love it) to the second generation 7.1 model around the time I last overhauled my PC and got the i9-13900KS, only to find out they stopped making them. No driver updates have been released since then either, leaving them pretty much dead in the water. I hope that there's no compatibility issues any time soon - thankfully, it seems that audio drivers aren't exactly something that tend to break over time.

Most of EVGA's businesses have folded or collapsed in one way or another. With the exception of their power supply business (which also changed considerably, since EVGA is no longer synonymous with quality after several straight garbage PSU series ranging from non-rated to the lower-end 80 Plus Gold models), EVGA had been committing a series of blunders and they've just about come to pay the price for it. Don't you think that if it was really a case of Nvidia charging extortionate prices for the chips, making their life hard, etc. - they'd not have a whole series of Radeons, including an RX 7900 XTX Kingpin out by now? There's no loyalty in business, anyone who believes that excuse is beyond silly. The way I see it, the reason EVGA often gets a pass and blame is shifted elsewhere is because they're a darling brand.

If that hypothetical 7900 XTX Kingpin existed, I would have one. I wouldn't even care about the usual trillions of bugs and performance issues(*). I'd have it, fullstop.

(*) i'm obviously joking here, ease up usual suspects