News EVGA Abandons the GPU Market, Reportedly Citing Conflicts With Nvidia

[bigdragon]

EVGA dropping out of the video card business is complete coorporate suicide.

They know this. Nobody gives up 40% market share unless they think staying in the GPU business will do more harm than good. If EVGA can't make money with the 40-series, then the oncoming avalanche of post-crypto GPUs must be absolutely insane. Remember, a record number of 30-series cards were produced and many AIBs sold direct to miners. The flood of former crypto cards and consequences for raising prices and denying gamers access to habitual upgrades s going to hit hard soon. We might actually see 40-series MSRPs below that of 30-series cards.

 

[LolaGT]

I seem to recall a LTT spat with some top dog from nvidia and it really showed that they operate like bottom feeders.
It is pretty easy to surmise they told evga to eat a bunch of margin down to nothing or less than nothing and that they didn't care if they didn't like it.

What do you do, you cut off the loss now, not wait for it to get worse.

It isn't really a surprise, it is big business and it seems like nvidia has been operating that way since their beginning.

 

[Darkbreeze]

While EVGA was in business with NVIDIA, they controlled 40% of the North American market share of AIC graphics cards.

Them quitting would definitely open up the inventory for other AICs to gobble up but it will take time for the die-hard EVGA fans to get adjusted to the new non-EVGA marketplace & as Jon Peddie predicts, It will take around 2-3 (possibly more) quarters for the North American GPU market to adjust to this huge change.

Even with ALL of the AIB partners trying to satisfy demand they have struggled greatly to do so for the last couple of generations. Taking away one of those partners that was supplying 40% of those cards means you can not only expect there to be an instant lack of supply, meaning nothing is going to be any better than it was last time around and will probably be significantly WORSE in terms of being able to get a 4000 series card, but as always, when supply is low and demand is high, you can expect there to once again be a major increase in the cost and for scalpers to rush in and make things 10x worse.

 

[Johnpombrio]

I have bought over a dozen graphics cards from EVGA including paying $1,500 for an EVGA RTX 3080 Ti this spring. I bet EVGA got stuck with a boatload of GPUs that it expected to sell to miners and was burned really badly. Or EVGA could not get a deal from NVidia for a nice discount. Their cards are great; I have bought their cards for decades, have had zero failures, and will miss them.
EDIT: GamersNexus video made it pretty clear the main reason for EVGA getting out of the GPU market. The owner is old and getting ready to retire. He also did not want "his" company to be bought by some corporation that is in it only for the money and will "ruin" the brand. Getting squeezed with a glut of inventory by the fall of the latest mining craze was enough to crystalize the radical change in the company's business plan.

 

[Zerk2012]

AMD could be licking it's lips, we will do anything you need to help you make our cards.

To me the green team and red team don't mean anything it all comes down to performance per dollar.

Really no big deal to me I buy and recommend MSI (green team) and Sapphire. (red team) Have used some PowerColor cards with 0 problems.

For the market getting flooded with mining cards I have never used a used card in any build. Well I have to take that back I did put my almost new Sapphire 7850 in a build for my sister and got 2X 6970's

 

[InvalidError]

you can expect there to once again be a major increase in the cost and for scalpers to rush in and make things 10x worse.

Not really: the reason why there were 3000-series shortages isn't lack of AIB manufacturing capacity, it was fabs being back-ordered for GPU dies, VRM components, VRAM and miscellaneous support bits. Having one less AIB to compete with means other manufacturers have one less AIB to compete against for whatever components their manufacturing was bottlenecked on. Manufacturers of those miscellaneous AIB-custom bits having one less AIB to manufacture parts for will also let them streamline their manufacturing a bit.

If Nvidia wants to make more FE cards, it will need more manufacturing capacity and the easiest way to expand board manufacturing capacity is to contract manufacturing out. Since it would be a little awkward to ask Asus, MSI, Gigabytes, etc. to make FE cards that will undercut their house-brand models, eVGA which bailed out of the retail GPU AIB business would be a conflict-free logical choice.

 

[aalkjsdflkj]

Even with ALL of the AIB partners trying to satisfy demand they have struggled greatly to do so for the last couple of generations. Taking away one of those partners that was supplying 40% of those cards means you can not only expect there to be an instant lack of supply, meaning nothing is going to be any better than it was last time around and will probably be significantly WORSE in terms of being able to get a 4000 series card, but as always, when supply is low and demand is high, you can expect there to once again be a major increase in the cost and for scalpers to rush in and make things 10x worse.

This is true if the problem was that the AIBs had plenty of supply from NVIDIA but couldn't get those products out the door. If the shortage was with NVIDIA (or ultimately the Samsung fab) not producing enough chips then reducing the number of AIBs isn't likely to change anything. I think the problem last time was mostly a lack of supply from TSMC (AMD) and Samsung (NVIDIA) relative to a very high mining demand. Without the mining demand I don't see supply being a big problem after a month or two.
I'd bet that significantly lower demand (due to low mining profitability) for the upcoming GPUs from both companies means we'll have no trouble finding cards at MSRP within a couple of months of release.

 

[spongiemaster]

Jay's video basically says Nvidia is undercutting the AIBs with its FE cards and EVGA cannot break even attempting to compete with those, so it makes no sense to make any more at the prices Nvidia is charging for their GPU kits.


What is corporate suicide is staying in the GPU business selling GPUs at a loss.

Agree completely. Though I think EVGA is in denial about how much crypto is to blame for this mess. Also, how much of the market does Nvidia control with their FE cards? It can't be that much. Anyone have actual numbers?

 

[Chung Leong]

Generally when a company exit a line of business for it's well known, it'd quietly license its brand to some lesser known manufacturer. For instance, we can still buy Kodak cameras and Nokia phones today. What EVGA is doing here is lighting a pile of money on fire.

Just another sign of a world driven crazy by social media.

 

[InvalidError]

What EVGA is doing here is lighting a pile of money on fire.

What pile of money? EVGA's stated reason for bailing out of GPUs is that it is currently making losses on sales at current retail prices and manufacturing costs. The money is already burning, bailing out of GPUs is EVGA's answer to put the fire out. There is no point in staying in a market where your monopoly component provider is squeezing you out of the market and causing you to lose money in the process.

The interesting part will be whether other AIBs will put up with Nvidia's demands while bidding for EVGA's slack or will we have more AIBs ditching Nvidia due to unpalatable obligations and restrictions.

 

[Giroro]

Fired by whom? He's the founder and CEO, it's a private company, their are no shareholders with massive stakes to push him out.

It's a private company? That sucks.

Then, I feel bad for EVGA's employees who are all definitely going to lose their jobs. The company is going to go out of business, and fast.

 

[SunMaster]

EVGA is doing what other companies should have done. Making money is fine, and a requirement. Leveraging a force like Nvidia has been doing in a duopoly ought to be punished. - badly. I'll cheer for the underdog - AMD.

 

[InvalidError]

Then, I feel bad for EVGA's employees who are all definitely going to lose their jobs. The company is going to go out of business, and fast.

Not as fast as they would if EVGA continued manufacturing GPUs they are almost guaranteed to make losses on.

 

[schwatzz]

Watch Intel and EVGA sign an exclusive partnership

 

[InvalidError]

Watch Intel and EVGA sign an exclusive partnership

Nah, the Jay video says EVGA has no intention of coming back to GPUs.

If EVGA makes GPUs again, it will probably be as a contract manufacturer: get paid up-front to put boards together for AMD/Nvidia/Intel, then let AMD/Nvidia/Intel worry about making a retail profit from them instead of risk getting screwed between the GPU chip kit's cost and crashing retail prices again.

 

[scottsoapbox]

I did spend almost 2k on their 3080ti so I guess they will probably have cash for a while ripping everyone off.

Did EVGA hold a gun to your head when you spent that $2K?
What? It was a voluntary exchange of money for something you wanted more than that amount of money? Hmmm... Then how was it a rip-off?

 

[ohio_buckeye]

You just wonder all the nvidia fans who were also EVGA fans, if that makes them consider looking at amd cards more seriously. Nvidia could lose market share over this one.

 

[InvalidError]

Did EVGA hold a gun to your head when you spent that $2K?
What? It was a voluntary exchange of money for something you wanted more than that amount of money? Hmmm... Then how was it a rip-off?

Two or more things can be simultaneously true: you can be willing to pay 2k$ out of your own pocket yet still be able to acknowledge the fact that the price is a rip-off next to the ~$500 manufacturing cost. In a healthy, competitive market, competition will cap your maximum net profit to 10-15% which usually translates to MSRPs about 60% above manufacturing and amortized costs.

 

[WINTERLORD]

If true this is kinda a sad departure good American company too! Who woulda thought

 

[FrodoBrandom]

This is probaboy because their largest market, ETH miners, are done mining.

Now their supply would be huge and.their demand relatively low.

 

[cAllen]

Damn...and I just bought their 3090 Ti FTW3 Ultra directly from them. I wonder how this is going to effect support and warranty.

 

[Co BIY]

Nah, the Jay video says EVGA has no intention of coming back to GPUs.

If EVGA makes GPUs again, it will probably be as a contract manufacturer: get paid up-front to put boards together for AMD/Nvidia/Intel, then let AMD/Nvidia/Intel worry about making a retail profit from them instead of risk getting screwed between the GPU chip kit's cost and crashing retail prices again.

Did they make their own cards ? I think they contract out their motherboards to ASrock.

If the largest volume seller leaves because there is not enough money to be made in the market then the market is going to be really ugly. Bad for Nvidia, probably worse for AMD (2nd place is worse in a bad market), disastrous for Intel ARC (How can you get a foothold when there are no buyers).

And if sales volumes are going to be extremely low then it makes it easier for Nvidia to pull more of the boards into their sales channels.

 

[hotaru251]

that EVGA doesn't think it can make money.

in video evga said a 3090 ti at 1399$ is losing $.
when Nvidia's version is 1099$ its clear which you pick.

also hearing AIB's not knowing price of what they selling until Jensen states it to public at reveal...thats crazy.
no business should be forced to work with you w/o knowing profit margin they should expect until its that far in in.

 

[InvalidError]

If the largest volume seller leaves because there is not enough money to be made in the market then the market is going to be really ugly. Bad for Nvidia, probably worse for AMD (2nd place is worse in a bad market), disastrous for Intel ARC (How can you get a foothold when there are no buyers).

There is plenty of money to be made, which is how Nvidia can sell RTX3090Ti FEs for $1100. The problem is that between the price Nvidia charges AIBs for GPU kits, the additional contract obligations Nvidia may tack on top of its most desirable SKUs to get rid of other things that aren't selling and the prohibition of AIBs straying too far from the reference design, AIBs cannot break even at Nvidia's FE price.

Basically, Nvidia is conferring an undue preference to itself while pricing, tied-selling and restricting AIBs out of the market with its contracts. It is much easier to turn a profit selling a 3090Ti for $1100 when you don't have to pay a $200+ Ngreedia tax on the GPU kit or have the tax cancel itself out since for Nvidia, it is merely moving from the left pocket to the right pocket.

 

[ThatMouse]

Feeling good about my recent eVGA 3080 purchase instead of waiting for a 4080. Think this might be my last Nvidia.