EVGA will no longer do business with NVIDIA

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Derangel

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eVGA’s board of directors need to move swiftly to get rid of that CEO or he’s going to destroy the company. I get nvidia might not be the easiest to do business with but unless You’re actually trying to destroy a company, you don’t burn bridges that 80% of your business runs through.

Pretty sure Han owns the entire company. The board literally cannot get rid of him. Also, if 80% of your business is operating at a loss and it is quite literally impossible to get any assurance that it will ever be profitable again it's not exactly smart to keep investing massive sums of money into developing those products or continuing a relationship that was already stretched to a breaking point.
 

Lakados

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eVGA’s board of directors need to move swiftly to get rid of that CEO or he’s going to destroy the company. I get nvidia might not be the easiest to do business with but unless You’re actually trying to destroy a company, you don’t burn bridges that 80% of your business runs through.
EVGA is privately owned, no board to fire him.
 

TaintedSquirrel

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Pretty sure Han owns the entire company. The board literally cannot get rid of him. Also, if 80% of your business is operating at a loss and it is quite literally impossible to get any assurance that it will ever be profitable again it's not exactly smart to keep investing massive sums of money into developing those products or continuing a relationship that was already stretched to a breaking point.
If they're selling cards at a loss, why are all the other AIBs still on board? EVGA is one of Nvidia's biggest AIB's, presumably they get priority (better treatment) than other companies. Except maybe Colorful which I think is larger globally. And the losses seem to apply to the 30 series today. Is the 40 series the same loss? If they were, why would the other AIBs agree to keep selling them? What pushed EVGA out, but nobody else?

The whole thing screams mismanagement. CEO wants to quit and take the company with him? Personal beef with Jensen? No way to know for sure. If there's an actual problem other AIBs will speak out or follow suit soon.
 

Meeho

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If they're selling cards at a loss, why are all the other AIBs still on board? EVGA is one of Nvidia's biggest AIB's, presumably they get priority (better treatment) than other companies.
Best customer service in the business doesn't come for free. I guess he rather cut his losses than became another generic AIB indistinguishable from the masses.
 

Derangel

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If they're selling cards at a loss, why are all the other AIBs still on board? EVGA is one of Nvidia's biggest AIB's, presumably they get priority (better treatment) than other companies. Except maybe Colorful which I think is larger globally. And the losses seem to apply to the 30 series today. Is the 40 series the same loss? If they were, why would the other AIBs agree to keep selling them? What pushed EVGA out, but nobody else?

The whole thing screams mismanagement. CEO wants to quit and take the company with him? Personal beef with Jensen? No way to know for sure. If there's an actual problem other AIBs will speak out or follow suit soon.

EVGA is the only one to comment on this publicly (well...Sort of publicly) but in their videos both Jay and Steve say they've heard complaints from other AIBs and everything EVGA told them matches up with what they've gotten from others. Why wouldn't the other AIBs keep playing along? They're now all in a position to take over the spot EVGA used to hold and most of them are far larger companies that will be able to easily absorb loses or tiny profits on GPU sales. I doubt they're exactly happy about the way the market is right now, but there's zero chance that ASUS, Gigabyte, MSI, etc wouldn't be willing to gut their reputation in exchange for a little more profit if they have to. They've all quite happily done it in the past, some of them recently too.

If Han wanted to quit he'd just sell the company to whoever came with the biggest check. I'm sure there have been several offers throughout the years. It sounds like he's confident the company can stay afloat while they sell other, more profitable, products. If this does end up sinking them it likely will be a slow process over several years and not something quick.
 

kirbyrj

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Let me break this down so you understand what's going on here. EVGA and pretty much all AIB's are responsible for the current GPU market situation due to greed.

Who is the greedy one again?

EVGA_NV_006.png
 

noko

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This is sound logic. Do you think that once the market stabilizes (if it stabilizes) and the glut of GPU's are not an issue eVGA has plans to look at returning to their partnership with NVidia?

I mean, I wouldn't write off another GPU boom happening this decade. Let's assume the worst and there's a big war, I really think that the applications for AI are going to be enormous, even if bitcoin mining is dead. Cuda cores are still the best way to execute deep neural networks and frankly I wouldn't be surprised if enthusiast graphics cards find themselves going into drones (of course who knows if components will be available by that time). I just think that it would be smart for the eVGA management to keep the NVidia door at least cracked open so that they can make a speedy return if the opportunity presents itself. That's the thing with volatile markets, it's usually not smart to sell the farm when things bottom out, it's better to wait for the next boom. GPU's used to be a fairly stable market with gamers but with crypto and AI, this market is really become something totally different than it was even just 10 years ago. I just hope that eVGA understands the bigger picture here and that they won't end up regretting this as a lost opportunity.
Considering the long relationship and for a period of time EVGA made the reference cards for Nvidia. EVGA had manufacturing capability then, not sure how much now since Nvidia cut them out there in the past. If EVGA can still manufacture, which since their boards were custom designed around reference but built by them. They could manufacture other items and maybe someone else cards.

EVGA making custom coolers, hybrids etc. For the 4000 series I see as possible with high profit margins. Maybe even more than making and selling the whole GPU.

Could Valve use EVGA to make their handheld s, next VR set? In other words this also frees up their assets for other stuff.

This has to be the best time ever to get out of making discrete graphic cards. As for the other AIBs, maybe the first domino have fallen.
 

magnetik

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Hopefully they don't go the way of BFG. IIRC BFG got out of GPU's first and not too long after.. poof. EVGA is more diversified (then BFG was back then) and they'll probably be alright. There are plenty of manufacturers making it without producing GPUs.
 

Meeho

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I seem to remember a guy that spoke about Nvidia Partner Program or such, that seems like a precursor to butfucking AIBs are getting now...can't put my finger on it...some grumpy old fart with a big mouth in the industry...
 

DooKey

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This is going to be BFG all over again isn't it?
My thoughts as well. I suspect as margins got tight that the warranty game was getting too expensive for them. Not to say that NV wasn't playing hardball. Anyway, there's more to this than meets the eye.
 

sfsuphysics

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Pretty sure Han owns the entire company. The board literally cannot get rid of him.Also, if 80% of your business is operating at a loss and it is quite literally impossible to get any assurance that it will ever be profitable again it's not exactly smart to keep investing massive sums of money into developing those products or continuing a relationship that was already stretched to a breaking point.
Was 80% of his business operating at a loss for the past two years when prices were not diminished and they were selling cards almost faster than they can make them?
 

polonyc2

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Yeah, no. No one does something like this to take a stand. EVGA is on very thin ice business wise. This was a business decision.

how are MSI, Gigabyte and Asus able to survive?...I would think they are in the same boat...they don't depend on GPU revenue as much as EVGA did but it has to be a major part of their business
 

sfsuphysics

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Who is the greedy one again?

EVGA_NV_006.png
Out of curiosity where did this graph come from, I can't read the bottom corner. It seems the Nvidia one is accurate at least until about 8 years ago (not going to bother looking beyond that). Looking up a few AIB partners (the ones that are tradable (i.e. not privately held like evga)) it seems their margin in anywhere between 19 and 24% granted that's for the company as a whole, but still. Seems like everyone is making money, at least until you get to the quarter where inventory needs to be cleared and discounts pop up.
 

DooKey

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how are MSI, Gigabyte and Asus able to survive?...I would think they are in the same boat...they don't depend on GPU revenue as much as EVGA did but it has to be a major part of their business
Those companies have a robust product portfolio of other items that sell well. They are bigger than EVGA. EVGA was simply a NV GPU company that dabbled in other products.
 

kirbyrj

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Out of curiosity where did this graph come from, I can't read the bottom corner. It seems the Nvidia one is accurate at least until about 8 years ago (not going to bother looking beyond that). Looking up a few AIB partners (the ones that are tradable (i.e. not privately held like evga)) it seems their margin in anywhere between 19 and 24% granted that's for the company as a whole, but still. Seems like everyone is making money, at least until you get to the quarter where inventory needs to be cleared and discounts pop up.

https://www.jonpeddie.com/news/evga-wont-offer-nvidia-next-gen-series
 

kirbyrj

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I think that bottom line may start going up since a major competitor is gone.

My understanding is that AIBs are pretty much at the mercy of Nvidia for their supply of GPUs and GDDR6X. Nvidia seems to be pushing for a larger share of the profits arguing that their R&D costs are higher and then they were setting "MSRP" prior to the 3080 12GB card also. People aren't generally going to line up to spend hundreds of $$ over MSRP if they can help it, so AIBs are backed into a corner on price. Cutting corners is going to be the new normal hoping that customers don't push their cards hard enough to break inside the warranty period.

I'm sure that chinese AIBs have less costs associated with their products compared to EVGA being US based. Clearly the warranty was affecting their bottom line as they significantly increased the cost of the 10 year warranty.
 

DukenukemX

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If they're selling cards at a loss, why are all the other AIBs still on board?
Either they're trying to convince Nvidia to lower prices or they're looking into the future for profits and just waiting out the economic storm. Also, a lot of the AIB's sell AMD as well as Nvidia. For all we know, next week we'll hear more AIB's dropping Nvidia.
The whole thing screams mismanagement. CEO wants to quit and take the company with him? Personal beef with Jensen? No way to know for sure. If there's an actual problem other AIBs will speak out or follow suit soon.
Of course its mismanaged because everyone was selling graphic cards at nearly $1k due to mining. Nobody likes to lower prices, because once you do the customer expects it to go down even further.

Who is the greedy one again?

EVGA_NV_006.png
They all are. The margins are low because MSRP didn't matter for a while and prices are whatever you make of it. Now that crypto is dead because they went proof-of-stake, this means there's no future in GPU's with crypto. It's just as much EVGA's fault for the current situation as much as Nvidia. They made and sold mining cards with no ports on it so it can't be used as a graphics card.
6tqfxz.jpg
 

DTN107

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Seems like there is some kind of GeForce Partner Program 2.0 happening this whole time in the background
 

IKV1476

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As a couple of others have mentioned:
Nvidia GPP.
If you don't know what it was, you probably should do a little research.
EVGA moving away from Nvidia sure stinks of the GPP that Nvidia wanted to force on everyone.
 

ChadD

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This makes perfect sense when you look at the stupid low margins for GPU AIBs... then factor in the insane costs of dealing with RMAs. Now add to that mix a company like Nvidia that won't tell you how much product is going to cost you, how much product you will get, or even send you drivers to test the product you are making. Why be in that business.

Everyone keeps saying GPUs are 80% of their business they must be crazy ! However it would be interesting to know what % of PROFITS GPUs account for. My guess is the other 20% of EVGAs business which is mostly power supplies has profits up in the 50-60 point range... where GPUs where single digit. (also GPUs always have a low cycle like right now where everything is a loss, Power supplies even MOBOs don't suffer that) If they ramp up their MOBO business... and now that they get a little bit of a PR pop from this lunch some new Extreme Power supplies to feed the next gens of power sucking GPUs. EVGA will probably make a lot more money. Having millions in sales is nice... but if your actual profits are in the single digits, that isn't actually great business.
 

ChadD

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Nvidia is getting what they want here though. It seems pretty clear Nvidia would prefer to not sell Chips to anyone. Why have a middle board "partner" sucking up ANY profit at all. When Nvidia started competing with their own customers... they should have all quit them.
 

staknhalo

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Nobody is going to see the 4000 series this year Except Jensen and Linus Tech Tips.

Nah I have a friend who every year without fail buys whatever ~$1200 Nvidia card every single gen, yet complains about not having money and costs and debt -_-

He'll no doubt buy the 4080 24GB or 4090 or whatever
 

NightReaver

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Nah I have a friend who every year without fail buys whatever ~$1200 Nvidia card every single gen, yet complains about not having money and costs and debt -_-

He'll no doubt buy the 4080 24GB or 4090 or whatever
Ah, is he the type that's 1 missed paycheck away from having to firesale their PC away? I get a laugh out of those.
 

Derangel

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Was 80% of his business operating at a loss for the past two years when prices were not diminished and they were selling cards almost faster than they can make them?

That's a fair point and makes me think of something. I wonder just how much profit AIBs were making off those insanely priced cards. Since now we know that Nvidia controls both the minimum and maximum pricing on video cards (higher-end models at least) that means those prices were approved by them. We also know that Nvidia made a lot of money during that time. I find it very hard to believe that Nvidia didn't demand more money from AIBs during that time, potentially severely cutting into the extra profit they stood to make.
 

staknhalo

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Ah, is he the type that's 1 missed paycheck away from having to firesale their PC away? I get a laugh out of those.

He just goes into CC debt and pays it, monthly, not pays it off totally, accumulating interest, making the cost actually more - until he does totally pay it off - then rinse and repeat next gen

In the time I've had my 3570k PC > current 5950x build, 8 years for me (2013-2021), 2 builds only, 3 GPUs (650TI Boost 2GB> 970 FTW> 2070 Ultra) I've seen him do maybe 4 complete main PC rebuilds - whatever current x900 Intel CPU (and also separately probably 2 or 3 gaming capable HTPC rebuilds in that same time - but he does pass his old GPU down to those at least), and like I said new Nvidia xx80 card every gen for his main rig.

Whatever we all got our faults lol - I give him shit from time to time and point it out to him but very surface level facetious manner, I'm not the guy's wife - when he then complains about costs and all I'm just like "yeah man wow that's crazy" -_-
 
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polonyc2

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EVGA should have just raised prices...seems like a lot of folks bought EVGA cards for their Customer Service and Step-Up feature versus the actual performance of the card...the EVGA 3080 FTW3 Ultra was my first EVGA card in years...my preferred brand for the last few years was the Gigabyte G1 Gaming...I only bought the EVGA because it's the only 3080 my local Microcenter had in stock...I actually went in hoping to get the Asus 3080
 

SilverSliver

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EVGA should have just raised prices...seems like a lot of folks bought EVGA cards for their Customer Service and Step-Up feature versus the actual performance of the card...the EVGA 3080 FTW3 Ultra was my first EVGA card in years...my preferred brand for the last few years was the Gigabyte G1 Gaming...I only bought the EVGA because it's the only 3080 my local Microcenter had in stock...I actually went in hoping to get the Asus 3080

They were not allowed to.
 

Bowman15

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They were not allowed to.

NV was able to lower the price of their FE cards while AIB's are stuck trying to sell their more expensive editions. Yes its AIB's own fault for not enough forward thinking that crypto bubble would burst but NV has done them no favors by undercutting the FE prices...
 

ChadD

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EVGA should have just raised prices...seems like a lot of folks bought EVGA cards for their Customer Service and Step-Up feature versus the actual performance of the card...the EVGA 3080 FTW3 Ultra was my first EVGA card in years...my preferred brand for the last few years was the Gigabyte G1 Gaming...I only bought the EVGA because it's the only 3080 my local Microcenter had in stock...I actually went in hoping to get the Asus 3080

Nvidia controls pricing, and determines how much they are allowed to make profit wise. In Nvidias mind EVGA adds little value and should be happy to make 8% margin on NVIDIA back.

I don't blame EVGA for tapping out at all. I would bet money that their smaller MOBO and Power supply units make more money, even though they are only 20% of sales.
 
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