Title kinda says it all. This is being widely reported. Here are a couple articles. You can Google for plenty more.
EVGA says they will continue to support already sold cards but are otherwise done.
Not sure how a company walks away from 80% of their revenue.
Developing story with dribs and drabs and tweets but supposedly EVGA isn’t planning on hooking up with AMD or Intel to make GPUs for them, either. Which… huh, how many keyboards and AIO coolers are you guys planning on selling?
They also said that they will honor all outstanding warranties and are keeping back sufficient stock for warranty replacements and repairs. So hopefully that won’t be an issue for card owners.
That’s good to hear but I am not keen on buying anything from them now. If they can pull the plug on 80% of their business I can’t trust them to be there for anything.
And I say that having just bought some EVGA products less than a month ago.
Only for those who already knew the references.
Others outside the field, like me, were just confused. I honestly guessed this was a story about the pharmaceutical industry.
But I looked it up and it’s about computers. As I understand it EVGA is a hardware company and NVidia is a software company. EVGA will no longer be manufacturing GPUs (graphic processing units - which are items of computer technology) to sell to NVidia.
This is significant to EVGA because these sales represented a major share of the company’s income. This is significant to NVidia because it will have to find a new source for GPU’s. This may be significant to other people because they may own computer technology which will no longer be supported.
Have I got it right?
Not exactly. Nvidia produces the actual chips, EVGA is one of a bunch of different manufacturers that take those chips and produce working hardware that consumers can then buy and stick in their machines. Nvidia still has dozens of other GPU manufacturers it’s selling chips to, but there are maybe 4-5 that are the “big boys” and EVGA is one of them.
We are in the Game Room so I figured people reading here would know it is not pharmaceuticals.
Sorry.
The reverse. NVidia makes the GPU (graphic processors). They sell those to companies like EVGA who put those chips on a board and sell the final product to the consumer.
For them to walk away, I must conclude that Nvidia was doing something that would cost them severely. It’s no secret that Nvidia’s requirements are ridiculous.
That said, I wouldn’t put this past being a negotiating tactic, showing they weren’t bluffing about dropping Nvidia is they didn’t ease up.
According to EVGA, the profit margin on that 80% was negative, and it was negative because nVidia has the power and forces them to maintain too-low prices to get chips. That sounds like it might be a good business to walk away from. Reminds me of all the Wintel computer manufacturers that went out of business because Microsoft and Intel collectively took about 105% of the profit margin on PCs. When someone has you over a barrel, sometimes you have to walk away.
Will this hurt NVidia though or just please EVGA competitors to not have the competition?
I don’t think they’re doing it to hurt nVidia. I think they’re doing it to get out of a money-losing line of business.
I did not mean to suggest EVGA was trying to hurt NVidia. I was not clear.
I meant to ask if this is something NVidia will care about? Will it affect NVidia? Make them reconsider how they do business? Or is it good riddance and other video card suppliers will be more than happy to fill the gap left by EVGA?
On the margin I think it may hurt nVidia some, or at least be the start of a trend toward that. nVidia is extracting excess profits from the market by using their position as one of only two suppliers of GPU chips, compared to many more graphics card manufacturers. The fewer graphics card manufacturers there are, and the larger they are, the more they will negotiate on equal footing with nVidia and be able to break nVidia’s price control.
If it HAD to happen, this is probably the best time for NVidia. They’re probably going to be hurting to move 4000 series cards right now anyway between 3000 series overstock, the crypto crash and now Ethereum (the largest GPU mining crypto) has changed so it’s no longer mined.
If EVGA had stepped away when NVidia was selling every GPU it could make the moment it made them, then it would probably hurt because I doubt all the other AIB partners could fill the void and NVidia would be losing money by the minute. I mean, I doubt NVidia likes the change but at least it’s happening during what will likely be a relatively slow period compared to Fall 2019-Spring 2022.
I wondered if it was the opposite.
NVidia was making bank for the last two years because of crypto. Then the bottom fell out of that. We have seen video card prices drop dramatically and you can actually get them in stores now.
NVidia is about to roll out the 4000 series but it is hard to ask a premium for those when 3000 series cards are going cheap. So, NVidia squeezes their partners and EVGA said fuck it…we’re not doing this any more.
I was thinking that having fewer 4000-series card producers would only make their problems worse for shifting to that card. And I presumed, like @Whack-a-Mole. that the issue that led to the break would probably have involved the 4000-series cards, as those are coming up so soon.
Oh, the crash is undoubtedly a big part of what happened. AIBs are stuck with 3000 series chips they can’t move and NVidia has an overstock of 4000 chips coming because of commitments they made with the fabs. Everyone’s hurting and trying to shift that hurt.
I’m just saying that trying to redistribute EVGA’s slice of the pie during the last few years would have been a complete cluster with money leaking out the whole time you’re not operating a peak efficiency. Right now, stuff is moving more like molasses so it sucks but at least it’s a low speed suck while you recalibrate.
It’s the beginning of a new generation where market demand isn’t really there. So Asus, Gigabyte, Zotac, etc will probably still be enough to stock the shelves while NVidia figures things.
Obviously, this all just my guesswork and I’m not a business guy so feel free to disagree or think I’m crazy 
It just occurred to me…
This must mean EVGA will be laying off a huge number of their employees as a result of this.
Now my tinfoil hat is on and I wonder if this is cover for massive layoffs?
I was watching a live stream of Linus Tech Tips (because live stream I cannot set it to a place so jump to 28:40 for that bit) and he says the official word is no layoffs will happen. The company will move people around.
It’s great that EVGA will try. I cannot imagine how they will pull it off. I hope for the best though for those employees.
Hmm, my current video card in my PC is an EVGA.
Oh well, I remember when 3dfx went out of business, and they were once the best source of 3D/gaming video cards. That’s the business.
(They were bought out by Nvidia in the end.)
I was a computer salesman when they were at their peak. Memories…
EVGA is 100% trying to hurt Nvidia given that the story broke through Youtube influencers with known axes to grind against Nvidia.
I don’t really get how EVGA failed to make money. You add $4 of LEDs to a GPU then give it a tame overclock and now you can get an extra $100 - $200 for it. Seems like easy margins.