In what can only be described as a shocking revelation, EVGA has announced that it is ending its partnership with Nvidia. It will no longer make or sell Nvidia-based GPUs, period. The news comes from Gamer Nexus, which received the information directly from EVGA’s CEO. The company has always only sold Nvidia GPUs and never supplied AMD (or Intel) components. It sells motherboards, power supplies, coolers, and peripherals, but GPUs make up the bulk of its product line. Taking it lightly as it puts the company in a strong position.
Gamer Nexus’ video covers a whole range of topics, starting with “info”. The video host said he got this information directly from EVGA’s CEO:
- This will stop creating the GPU.
- Existing customers will still receive support for their warranty.
- Company has stock on hand for replacement/warranty.
- It expects to run out of GPUs by the end of 2022.
- It’s staying in business, it’s not shutting down.
- It will not sell its business.
- EVGA will not begin selling new products.
- It will not partner with Intel or AMD.
- It produced engineering samples of the RTX 40-series but will not sell them.
- EVGA believes that Nvidia screwed it up (its words).
EVGA’s side of the story is that the decision is about honor and principle as opposed to a financial one. It doesn’t like how it has been treated by Nvidia and will stop selling GPUs rather than continue dealing with the company. As an example, it said that Nvidia doesn’t tell partners launch prices for GPUs until Jensen reveals it on stage. Nvidia also sets upper and lower limits on card pricing. This would theoretically discourage innovation at the high-end, as well as prevent partners from offering budget GPUs. Gamer Nexus says it has heard similar complaints about pre-launch treatment from MSI, Asus and Gigabyte.
Another motivation for EVGA is that it says Nvidia undercuts its partners by selling low-cost Founders Edition cards. Nvidia can do this because it makes the board itself, so there is no additional cost to third parties. EVGA’s head of operations also said the company has made Nvidia aware of its concerns on several occasions. He summed up the situation by saying, “You can only ask so many times.”
Typically, the company’s CEO says he’s tired of how Nvidia is dealing with it. It’s not getting the recognition it deserves from Nvidia, and it won’t tolerate it anymore. At the same time, the CEO was adamant against selling the company. He said it must be sold to investors, who won’t think about it as much.
EVGA revealed that 78 percent of its revenue comes from GPUs and 20 percent from PSUs. The remaining two percent is made up of motherboards and peripherals. Additionally, its profit margin on PSU is 300 percent higher than its GPU margin. So even though it doesn’t make much of a profit on GPUs, apparently, it still represents the lion’s share of its revenue.
To be fair to Nvidia, Gamer Nexus points some of the blame to EVGA’s shoulders for this decision. It noted that the company ordered a lot of GPUs during the crypto mining boom. We noted some of EVGA’s significant selling prices on its current RTX 30-series cards, as it desperately tries to get rid of them. This includes up to $1,000 off the RTX 3090 Ti. Obviously, all those discounted GPUs represent hundreds of dollars in losses for each GPU sold The company reportedly lost money with the RTX 20-series for the same reason: it ordered too many and couldn’t sell them all. These factors may have contributed to the decision to sever ties with Nvidia.
EVGA’s future is uncertain. The company has 280 employees worldwide and has already laid off 20 percent of its Taiwanese workforce a few months ago. However, EVGA said it will not lay off more people, but may be inconvenienced by canceled projects. EVGA says it has no debt, is liquid and owns all of its buildings
Going forward, EVGA says it has no plans to work with AMD or Intel. It’s a wonder how both companies are on track to launch next-generation GPUs, and EVGA has all the skills. The video ends with an anonymous Nvidia employee reinforcing EVGA’s allegations, in spirit. This employee said that Nvidia’s CEO sometimes wonders why board partners “make money for not doing much?” Nvidia knows it doesn’t have the supply chain to make all the boards itself. The employee points out how Apple sells all of its hardware itself, thus making a profit on each unit sold. Nvidia will reportedly want to emulate Apple one day, but right now, it doesn’t have the global supply chain necessary to carry the weight alone.
We’ll wait to see if Nvidia publicly responds to this situation. EVGA has been an Nvidia stronghold for more than 20 years, so such an action is as sudden as it is shocking. We wouldn’t be surprised if it switched camps to AMD due to rumors about RDNA3’s performance. Intel is also reportedly having a hard time finding partners for the Arc, so this could present a golden opportunity for ChipZilla.