It is about respect.
EVGA, one of the largest manufacturers of Nvidia-based GPU cards, has stopped making them. However, the news is more: EVGA CEO Andrew Han stated to Gamers Nexus (opens in new tab) that the California-based company will not only stop making graphics cards, but that it will also be using the next generation Nvidia chips.
EVGA has been producing graphics cards since 1999 when it was founded. However, Han says that he wouldn’t entertain the idea of working alongside Intel or AMD to continue making cards.
According to both sources, EVGA’s decision was at least partly motivated by frustration at Nvidia’s treatment. Gamers Nexus stated that it is “about respect.” Graphics cards account for 80% of EVGA’s business. However, it does not plan to shut down its operations because of the split with Nvidia. Gamers Nexus was told by EVGA that they don’t have any layoffs. After EVGA has sold off its stock of RTX 30-series graphics cards, the company will concentrate on its other products which include power supplies and motherboards.
EVGA’s Nvidia graphics card sales make up the majority of its revenue right now. However, Han explained to Gamers Nexus, that the margin on these cards is very thin and that EVGA has a 300% higher profit on power supplies. EVGA is not yet clear on how it will eliminate the largest portion of its business, which includes staff who are currently involved in graphics card engineering and support. Gamers Nexus says that “attrition” is to be expected.
EVGA’s decision was not the kind of business decision one would expect. Han reportedly felt that Nvidia had been unfairly treating EVGA and stated to Gamers Nexus that it was easy for him to quit working with Nvidia because it was so difficult.
Jon Peddie Research claims that “EVGA’s relationship with Nvidia changed from a true partnership to a customer-seller arrangement. EVGA was not consulted on product announcements or briefings, was not present at events and wasn’t informed about price changes. Gamers Nexus and Peddie also claim that EVGA was disappointed by Nvidia’s pricing of its cards using its Founders Editions.
EVGA’s direct communication about the subject reveals much more. EVGA posted a statement in its forums today stating that it will continue to support existing graphics cards but not the next-generation graphics cards.
The company stated that EVGA was committed to its customers and would continue to offer support and sales on the existing lineup. “EVGA also wants to thank our wonderful community for their many years of support for EVGA graphics card products.
It is not clear what Nvidia’s view of EVGA’s relationship is. Although Nvidia did send PC Gamer a statement regarding EVGA’s exit from the GeForce scene it isn’t exactly clear.
A representative from Nvidia stated that “We’ve enjoyed a great partnership EVGA over many years and will continue supporting them on their current generation of products.” “We wish Andrew Han and all our friends at EVGA all of the best.”
It’s reasonable to believe that Nvidia may have more to share if it wasn’t a publicly traded company with a $328B stock market cap. But that’s what we’re seeing right now.
Other manufacturers such as Gigabyte and ASUS will likely fill the void left by EVGA’s exit from Nvidia’s graphics card business. Nvidia teased recently something called “Project Beyond”, which we believe is related to its upcoming GeForce RTX40-series GPUs. We will be hearing more about this in the coming months.
Gamers Nexus’ 30-minute Gamers Nexus video (opens in new tab), about EVGA’s exit from the graphics card industry includes more speculation on the motivations of the company and Han’s future plans. The EVGA CEO stated that he doesn’t plan to retire or sell EVGA.
