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
What some have not grasped is how many companies stepped away from Nvidia, Because of Nvidia before.
It actually ended up working out for the consumer, the last 4-5 months in the US the brand new 2060s have actually been faster and cheaper than the 3050....... (what exactly is the issue ?)I think your confusing what actually happened. These 2060s aren't old stock that they are holding, there new production that NVidia actually pitched the idea to them.
Nvidia pitched the idea because there the idiots that basically wanted these third party brands to sell what was essentially a 7 year old GTX 1070 (3050) for $300+ brand new......
I am not shedding a tear. Let's dance on their grave & celebrate the market is back to normal. Thanks to recession there will soon be a price war battling for customers.
Bryan has also a very "balanced" take on it.
Double post, just watched the GN AIB preview, and just checked the define 7 compact and it barely fits the ASUS TUF 4090…. What are GPU manufacturers doing? What are nvidia’s alleged design limits when we’re already at 3+ slots and >12”/320mm and the ASUS Noctua design demonstrated you could do a lot better just by using better fans? SFF had shown it’s been a worthy design change for years now… why hasn’t it been implemented?
All of this works this way. The thing about apple is it's a phone company, but it's cleaning house not via the phone but the app store. On the corporate side they aren't making money off the macs but they make a killing off support and software and other items. Gaming works this is way as well for everyone not Nintendo. Microsoft and Sony sell at a loss for a long time, though eventually they make a profit so little what matters is that it's not a loss. The truth is the clean up on the games they sell as they take a portion.
Hardware beyond selling chips is tiny margins. Even that is also only viable at scale.
Using a US example, California has a statewide sales tax rate of 7.25% but individual counties (sometimes cities) often have their own sales tax so the rate in San Francisco (City and County), South San Francisco (San Mateo County), and Cupertino (Santa Clara County) might all be different (in fact, they are).
In the same way, EU member nations have their own tax rates.
A company like NVIDIA doesn't know where Reader X lives and where he/she will be buying Product A. And tax rates change.
Same thing with income taxes. Whatever exemptions and deductions you claim are probably different than everyone else's. Married people have different tax rates than single people. Some states have their own income tax (like California) while others do not (like neighboring Oregon).
I agree with Valantar that you have a very simplistic view of these systems.
But how did this thread become about taxes? Not everyone is grown up (read: OLD FART) enough to know how taxes work, I still get confused...:nutkick: