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
Reduced demand.
Bad business decisions.
Bad partnership arrangement(s).
That's all there is to it.
Why Andrew Han killed GPU division instead of stepping down as CEO? Some people just like blame others if business doesn't go as planned.
This MSRP bogeyman makes no sense. Like we never seen cards insanely over MSRP.
i guess the focus there is "consistently", but why would you want to do that? lose money? dumping? race to the bottom? shady quality that comes to endanger nvidia brand?
They're clearing inventory. Which is what they usually do. Though admittedly MRP, as it's called here, or MSRP is a dated phenomenon.You clearly don't.www.jonpeddie.com/news/evga-wont-offer-nvidia-next-gen-series
Nvidia is competing against & selling to their "partners" ~ seems like an abusive relationship to me! Of course this would affect you less if your cost of operations is lower or you cut costs elsewhere, like warranty or quality components, so maybe that's why MSI/Gigabyte et al are in a better position?
Nvidia and the AIB'sthe AIB's and the retailers, i'm clearly not the one in the dark here.Best buy has some agreement to move nvidia cards, they decided to cut prices to move inventory, that's normal, it's not losing money, it's making what you can from a product that doesn't move and it's at the end of life.
Other retailers are doing the same all the time and i'm sure they aren't buying form ASUS at 1000 and selling at 800 to lose money themselves, the AIB's are also losing money and selling below MSRP, EVGA said so, they are losing money on every card sold now believing the EVGA words.
When really what more seems to be happening, as GN said, that Nvidia is trying to be more like apple which is ultimately rather anti competition and thus becomes rather anti consumer....but hey just keep giving them more money, that 85 - 10 - 5 % split on steam sure shows there is fair healthy competition going on......
Hopefully this is a big enough move to make Nvidia reconsider their treatment of business partners - it's been widely reported how they operate on razor-thin margins, which inevitably trickles down to consumers in the form of inferior products and engineering shortcuts. And, of course, the concept of a first-party Founders Edition is inherently anticompetitive with said partners - moving to a model more like Google's Nexus phones ("official", but in partnership with someone) would be far more fair. But my real hope is that Nvidia can realize that they can't expect 50-60% margins on chips while maintaining working partnerships with AIB makers - and that such a shift would then also carry over to AMD and the industry more broadly. Yes, chipmaking is massively expensive and requires having tons of cash on hand, but the ongoing trend of chipmakers working explicitly to raise their margins is very troubling in the mid-to-long term.
But why more often? Nvidia needs to assure there is some quality standards. MSI would be more than happy to sell you a Ventus 4090 with a 1mm heatshink and one of those server fans running at 20000 rpm if they let them.
And you then know, they'll do it again, and DGAF about you and yours.
On the cards since 2016 founder's education rolled out.
Oh and Nvidia's ownership of Arm would have been the same.
Nvidia wants to be Apple, and doesn't care who gets stomped out and would prefer no competition.
They just f'ed up their inventory, to many cards in stock counting that the crypto demand would never stop.
You have no idea what they're contact was.
But a contract determined the allocation long ago.
Nvidia determined their MSRP liquidly, on the fly since day one.
Every one else just had to roll with it.
What if that board partner bought the GPU (chip) at 1.5k & couldn't sell it below 2.5k to make any profits? Just a random number so don't be pedantic.
Then Nvidia undercuts you by selling their own cards at 2k ~ win/win right? No I guess sucks to be you EVGA, or MSI/ASUS et al.
Are you pretending to not understand how this rolled or you just don't care :ohwell:
The claim made over and over again that EVGA bussiness plan was to keep the same MSRP, keep selling 3090ti at the MSRP when demand plummeted, there's a lot of used cards in the market and the new cards are coming in weeks. That sounds like a stupid business plan to me. Of course prices had to come down to clear inventory.
They just f'ed up their inventory, to many cards in stock counting that the crypto demand would never stop.
Nvidia shouldn't lower MSRP, no one should lower prices. The end result was those were never going to be sold.
Absurd point made there mate.