Wednesday, September 21st 2022
EVGA Announces Cancelation of NVIDIA Next-gen Graphics Cards Plans, Officially Terminates NVIDIA Partnership
Towards the latter half of August, multiple EVGA employees involved in technical marketing and engineering had let us know privately that they were leaving the company for other ventures. When pushed further, several hinted towards some decisions being made by EVGA's management, including CEO Andrew Han, that would jeopardize their future. Some even went far enough to say they would share more in a few weeks time about how they felt exactly about their time there, the various issues that kept them from doing their best, and also that at least a couple of ex-employees were let go. TechPowerUp was doing due diligence in collecting the facts while keeping emotions aside from contacts who were understandably not in the best of moods, and one thing common across the board was there was something major coming up dealing with the EVGA GPU product line.
Today EVGA decided to throw a massive curve ball by formally announcing the company is canceling its plans to carry the next generation of graphics cards. Given EVGA's revenue sheets point to nearly 80% contribution from being an NVIDIA add-in card partner, this effectively also means an end to a long partnership with NVIDIA. The company's CEO confirmed as much to a few media channels citing poor margins and a challenging, stressful relationship that was no longer fruitful. There are no plans for EVGA to partner with AMD or Intel at this time when it comes to graphics cards and the company stressed they will continue to sell and support current-gen GPUs having retained enough units for RMA purposes too.
Jon Peddie Research also speculates EVGA is going to shift its priorities towards power supplies and motherboards instead that allow for higher margins and a more uniform, predictable sales pattern. Time will tell how EVGA, and indeed NVIDIA too who now has to re-distribute its GPU allocation among other partners and retail solutions, will come out of this split. It certainly does not seem to be an amicable one and we do not expect the partnership to resume anytime soon. This also affects companies who were no doubt planning on accessories for EVGA-branded GPUs, such as custom watercooling blocks from the usual suspects such as EKWB, Alphacool, and Bitspower.
What About Existing Customers
All existing owners of EVGA graphics cards will remain fully covered by warranties, including full replacements if needed. The company has withheld inventory of EVGA graphics cards from retailers (and will probably recall some perfectly-functional cards), so it has buffer stock to serve existing customers in need of total replacements or RMA.
What EVGA's Future Looks Like
EVGA CEO Andrew Han stated that the company has no plans as of now to partner with another GPU manufacturer like AMD or Intel, and the exit from the graphics card business will trigger an "imminent downsizing" of the company (to shed employees associated with the graphics card business). This could also be a subtle hint to AMD and Intel that if they're looking to work with EVGA, they should express interest right now.
Graphics cards made up over three-quarters of EVGA's revenue, and so we're not sure what the company could do next. If one were to speculate, the company could increase its presence in the prebuilt notebook and gaming peripherals businesses, and probably even ride the growth-cycle in the power-supply market with ATX 3.0 and PCIe Gen 5. Next-generation high-end graphics cards are expected to trigger upgrades among those with PSUs 4 years or older, as older PSUs, particularly mainstream ones, will find it hard to deal with the power excursions (spikes) of high-end PCIe Gen 5 graphics cards. The company could also retain its PCB engineering team to further develop its motherboard business. But all these are just speculation. Unless EVGA significantly invests in its other businesses, it's done.
How does this affect NVIDIA in the North American market?
EVGA was particularly popular in the North American market, among DIY PC enthusiasts. Other NVIDIA partners such as ASUS, could attempt to fill its void, but the distinct industrial design of EVGA will be lost, as would features such as iCX; and EVGA-exclusive customer programs such as trade-in upgrades. NVIDIA may also attempt to bring in new partners to the North American market to fill EVGA's void, such as GALAX (Galaxy), or Colorful, which are both major graphics card OEMs in the Chinese market. It will now fall on them to match the design and quality standards EVGA established. EVGA's exit will have minimal impact on NVIDIA's bottom-line, as those in the market for a GeForce graphics card will ultimately buy one from whichever brand.
NVIDIA's first reaction to this development is as follows:
Update Sep 21st: KINGPIN, a long time associate of EVGA, behind some of their fastest boutique graphics cards and motherboards, posted a note of gratitude for all the fans of EVGA + KINGPIN, and stated that KINGPIN Hardware may continue in some form.
Sources:
Jon Peddie Research, Gamers Nexus, EVGA, Tae Kim (Twitter)
Today EVGA decided to throw a massive curve ball by formally announcing the company is canceling its plans to carry the next generation of graphics cards. Given EVGA's revenue sheets point to nearly 80% contribution from being an NVIDIA add-in card partner, this effectively also means an end to a long partnership with NVIDIA. The company's CEO confirmed as much to a few media channels citing poor margins and a challenging, stressful relationship that was no longer fruitful. There are no plans for EVGA to partner with AMD or Intel at this time when it comes to graphics cards and the company stressed they will continue to sell and support current-gen GPUs having retained enough units for RMA purposes too.
All existing owners of EVGA graphics cards will remain fully covered by warranties, including full replacements if needed. The company has withheld inventory of EVGA graphics cards from retailers (and will probably recall some perfectly-functional cards), so it has buffer stock to serve existing customers in need of total replacements or RMA.
What EVGA's Future Looks Like
EVGA CEO Andrew Han stated that the company has no plans as of now to partner with another GPU manufacturer like AMD or Intel, and the exit from the graphics card business will trigger an "imminent downsizing" of the company (to shed employees associated with the graphics card business). This could also be a subtle hint to AMD and Intel that if they're looking to work with EVGA, they should express interest right now.
Graphics cards made up over three-quarters of EVGA's revenue, and so we're not sure what the company could do next. If one were to speculate, the company could increase its presence in the prebuilt notebook and gaming peripherals businesses, and probably even ride the growth-cycle in the power-supply market with ATX 3.0 and PCIe Gen 5. Next-generation high-end graphics cards are expected to trigger upgrades among those with PSUs 4 years or older, as older PSUs, particularly mainstream ones, will find it hard to deal with the power excursions (spikes) of high-end PCIe Gen 5 graphics cards. The company could also retain its PCB engineering team to further develop its motherboard business. But all these are just speculation. Unless EVGA significantly invests in its other businesses, it's done.
How does this affect NVIDIA in the North American market?
EVGA was particularly popular in the North American market, among DIY PC enthusiasts. Other NVIDIA partners such as ASUS, could attempt to fill its void, but the distinct industrial design of EVGA will be lost, as would features such as iCX; and EVGA-exclusive customer programs such as trade-in upgrades. NVIDIA may also attempt to bring in new partners to the North American market to fill EVGA's void, such as GALAX (Galaxy), or Colorful, which are both major graphics card OEMs in the Chinese market. It will now fall on them to match the design and quality standards EVGA established. EVGA's exit will have minimal impact on NVIDIA's bottom-line, as those in the market for a GeForce graphics card will ultimately buy one from whichever brand.
NVIDIA's first reaction to this development is as follows:
"We've had a great partnership with EVGA over the years and will continue to support them on our current generation of products. We wish Andrew and our friends at EVGA all the best."EVGA's full statement is as follows:
EVGA CEO Andrew HanEVGA has terminated its relationship with NVIDIA. EVGA will no longer be manufacturing video cards of any type, citing a souring relationship with NVIDIA as the cause (among other reasons that were minimized). EVGA will not be exploring relationships with AMD or Intel at this time, and the company will be downsizing imminently as it exits the video card market. Customers will still be covered by EVGA policies, but EVGA will no longer make RTX or other video cards. The company already made, 20 EVT samples of EVGA RTX 4090 FTW3 cards, but will not be moving to production and has killed all active projects pertaining to cards, including KINGPIN cards.According to JPR, EVGA was the best-selling NVIDIA AIB in the US market, with a market-share of nearly 40%. NVIDIA would have lead its board partners to take its place.
Update Sep 21st: KINGPIN, a long time associate of EVGA, behind some of their fastest boutique graphics cards and motherboards, posted a note of gratitude for all the fans of EVGA + KINGPIN, and stated that KINGPIN Hardware may continue in some form.
I'm thankful for all the industry friends, old colleagues, etc. that reached out. It means a lot and I appreciate it. The news isn't received well ofc, and I'm mostly sorry for the fans and people that are passionate for our brand and everything that we have done here over the years at EVGA. If the KP hardware is meant to continue on in one way or another, I'm sure that it will :). The EVGA and PC hardware enthusiast community have been great to me and my teams here over the years, THANK YOU.Update Sep 21st: Jensen Huang responded to a question about his thoughts on EVGA in a Q&A session today:
Jensen HuangYou know, Andrew (EVGA CEO) wanted to wind down the business, and he's wanted to do that for a couple of years. Andrew and EVGA were, are great partners and we're great partners, and I'm sad to see them leave the market. But, he's got other plans and he's been thinking about it for several years, so I guess that's about it. The market has a lot of great players and it will be served well after EVGA, but I'll always miss them, they were an important part of our history, Andrew is a great friend. I think that it was just time for him to go do something else."
536 Comments on EVGA Announces Cancelation of NVIDIA Next-gen Graphics Cards Plans, Officially Terminates NVIDIA Partnership
Notebooksbilliger in Germany was occasionally selling some Founder's Edition cards, but that was a handful every couple of weeks, it almost looked like they were grey imports from elsewhere.
It looked to me like AIB pressured Nvidia to remove Founder's Edition cards from certain markets, and limit their availability in others. I had absolutely no problem with Founders, I think they were the only cards with an interesting design, and I'd buy it in a heartbeat if I could get one.
Oversized companies that dominate the market is where capitalism stops doing well.
A few days before RTX 4090 release, a month before RTX 4080. All these cards should have already be in existence, with design done months ago, and manufacturing also done weeks ago.
I've heard that essential employees were leaving the company for quite some time, so the decision was probably already made before the beginning of development of Ada cards, so they didn't waste the design, development and manufacturing on a product they won't launch.
So why wait until Ada launch? So they didn't hurt the sales of existing Ampere stock? So it would have a maximum impact in a time every PC enthusiast watches the news regarding GPUs?
PS
I wonder, if AMD would be able to use the situation, fingers crossed.
E.g. Microsoft didn't even bother TALKING to them for their previous console (nor current).
Apple went "FO with that sh*t" and that was back when AMD going bust was quite a possibility.
Seems to be something about Huang's personality at play. And it is hurting NV in major ways.
I know Founder's Edition cards aren't to everyone's liking, but if Nvidia were the only "manufacturer", I'm sure they could make a wider array of offerings - from cheap coolers to top of the line water cooled behemoths?
hans being a typical prideful asian ceo just like jenson and hes about to pay for it
there will not be a evga in 3-6 months quiet possibly less
can we please stop treating this as some kind of hero maneuver by evga what this is is two old men having a pissing contest at everybody else's expense
Of course, there's also the fact that Nvidia very much enjoys shifting low margin endeavors like low end card design and production onto partners. For them it's the best of both worlds after all - they sell the chips at high margins for AIB partner cards, and sell their own premium SKUs at high margins, while AIB partners fill out the gaps.Fucked up how?How so?Seems rather unlikely. They'll see a major revenue dip, sure, but their PSU business is very solid. Downsizing is not the same as going under.Why shouldn't we be happy that someone is putting pressure on a massive company with massive market power to change their practices? If pride is what it takes to stand up to a bully, then that's what it takes.
It's not like this hurts consumers after all - they'll still be honoring warranties, and their chip allotments will go to other AIB partners instead. Combine that with a supply glut and very low demand for GPUs currently and I really don't see this as harmful to consumers in any way.
All that horseshit about gigabyte PSUs in your region being top tier (may the good lord help your fellow countrymen). Your credibility went right out the window with that nonsense btw. To now predicting EVGAs imminent demise...yuh huh. And it had nothing to do with the company, you hate the owner.
strawbale of hay that broke the proverbial camel's back, with EVGA already frustrated with their "partnership" for years, but this finally tipping things over into "no longer worth it" territory.They won't be missed.
As for not wanting to go AMD or Intel - to me it's sensible to not jump to a new option right off the bat. Of course they're in a relatively luxurious position when they seem able to afford a period to figure this out, but then they do have a very solid PSU business that no doubt supports the company well. They might judge this part of the industry to not be worth taking part in any longer, which seems like a pretty valid perspective. When major partners like Asus have been reporting low single digit margins for several generations already, this really isn't a viable business model long term, and with chipmakers working to push their margins higher, this just squeezes AIB partners even more. Something needs to change here, unless we want to see massive consolidation across the GPU industry.
Marketing is extremely expensive, and most AIB partners and even major tech brands like Asus, HP, Dell etc. don't necessarily have the means to market their products at scale in all the markets they operate in. That's where marketing support funds from chipmakers come into play. And these days, it's an absolute necessity for operating in this business, as margins for AIB partners are just too slim to pay for their own marketing. And it's obvious that any chipmaker will give more support to an exclusive partner than one that they share. And, of course, the whole GPP debacle was centered around Nvidia heavy-handedly trying to enforce their will onto AIB partners through how they gave out marketing funds.
also going out of business soon(tm)