GeForce GPUs account for 80% of EVGA’s revenue — but they’re cutting ties with Nvidia anyway

Graphics card producer eVGA has made a reputation for itself in manufacturing and promoting Nvidia GeForce GPUs for twenty years, together with a number of the most engaging choices available on the market. However in accordance with YouTubers at Nexus for gamers, Analyst John BedeAnd the EVGA Forum PostEVGA is formally ending its relationship with Nvidia and the playing cards will not be manufactured primarily based on the corporate’s RTX 4000 GPUs.

EVGA graphics playing cards have completely used Nvidia GPUs since their founding in 1999, and in accordance with Players Nexus, GeForce gross sales account for 80 % of EVGA’s income, making this a important and arguably threatening change for the corporate. However EVGA CEO Andrew Han informed Players Nexus that the choice was about “precept” fairly than monetary issues — and Han complained a couple of lack of communication from Nvidia about new merchandise, together with details about pricing and availability.

Nvidia’s pricing technique has apparently been one other sore level for EVGA. Nvidia’s first-party Founder’s Version playing cards typically underprice playing cards supplied by EVGA and different distributors, forcing them to both decrease costs or lose gross sales in consequence.

Nvidia might not be solely unsuitable right here – the broader dynamics of the GPU market are additionally laborious to navigate. As Peddie additionally factors out, whilst GPU prices have risen, revenue margins for board companions that make Nvidia GPUs have fallen. Trendy high-end GPUs have considerably larger energy, cooling, and PCI Categorical necessities than playing cards only a few years in the past, making them costlier to design and manufacture, and experiences on the RTX 4000 sequence recommend that development will solely proceed.

Profit margins for Nvidia's additional board partners like eVGA have been dropping for a while.
Zoom / Revenue margins for Nvidia’s further board companions like eVGA have been dropping for some time.

It additionally in all probability doesn’t assist that the GPU market has fallen to the bottom this yr, after greater than a yr of restricted stock and inflated costs. Slippage of cryptocurrency values ​​and Steer clear of Ethereum cryptocurrency from GPU mining Each have flooded the market with used GPUs, which in flip affected the demand for brand spanking new GPUs. On Nvidia’s newest earnings name, CEO Jensen Huang Complained about “excess stock” of RTX 3000 series GPUs who made it Missed quarterly revenue forecast by $1.4 billion.

On the a part of Nvidia, its public stance will be summed up as “good luck too lengthy”.

“We’ve constructed a incredible partnership with EVGA over time and can proceed to assist them in our present era of merchandise,” Nvidia spokesperson Brian Del Rizzo. Tell Tom’s Hardware. We want Andrew [Han] And our associates at EVGA all one of the best. “

The tip of the EVGA-Nvidia relationship may additionally damage Nvidia — Peddie says EVGA accounts for about 40 % of Nvidia’s GPU market share in North America — however over the medium time period, the corporate isn’t prone to be too surprised. Nvidia has different companions, and regardless of the variations in cooler design and clock speeds, GPUs in the identical sequence are likely to carry out equally no matter which of the Nvidia companions really made them. In different phrases, the RTX 3070 is an RTX 3070, and individuals who need one will purchase one from one other firm if EVGA merchandise aren’t accessible.

EVGA will proceed to promote its different merchandise, together with energy provides, though Han informed Players Nexus that the corporate doesn’t plan to return to the GPU market in any respect — not with AMD or Intel GPUs, and never with future GeForce product generations. Han additionally stated that EVGA will proceed to promote playing cards primarily based on older GeForce GPUs, together with the RTX 3000 sequence, till they run out of inventory on the finish of 2022. The corporate may even hold sufficient inventory of those playing cards available to fulfill any guarantee repairs or replacements. for presently supported playing cards.

Kyle Orland contributed to this report

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