GeForce GPUs make up 80% of EVGA's revenue, but they're still cutting ties with Nvidia

GeForce GPUs make up 80% of EVGA’s revenue, but they’re still cutting ties with Nvidia

Graphics card maker eVGA has made a name for itself making and selling Nvidia’s GeForce GPUs for two decades, including some of the most attractive options on the market. But according to Gamers Nexus YouTubers, analyst Jon Peddie, and an EVGA forum post, EVGA is officially ending its relationship with Nvidia and won’t be making cards based on the company’s RTX 4000-series GPUs.

EVGA’s graphics cards have exclusively used Nvidia GPUs since its inception in 1999, and according to Gamers Nexus, GeForce sales account for 80% of EVGA’s revenue, making it a momentous and potentially dangerous change for the company. But EVGA CEO Andrew Han told Gamers Nexus the decision was about “principle” rather than finances – Han complained about a lack of communication from Nvidia about new products, including information on prices and availability.

Nvidia’s pricing strategy was apparently another sore point for EVGA. Nvidia’s proprietary Founders Edition cards could often undercut the prices of cards offered by EVGA and other vendors, forcing them to lower their prices or lose sales as a result.

Nvidia may not be entirely at fault here – the broader dynamics of the GPU market are also difficult to navigate. As Peddie also points out, even as GPU costs have gone up, profit margins for board partners who make Nvidia GPUs have gone down. Modern high-end GPUs have dramatically higher power, cooling, and PCI Express signaling requirements than cards from just a few years ago, making them more expensive to design and manufacture, and reports on the RTX 4000 series indicate that this trend will only continue.

The profit margins of Nvidia's add-in card partners like eVGA have been shrinking for some time.
Enlarge / The profit margins of Nvidia’s add-in card partners like eVGA have been shrinking for some time.

It also probably doesn’t help that the GPU market has fallen this year, after more than a year of limited inventory and inflated prices. Declining cryptocurrency values ​​and Ethereum cryptocurrency’s move away from GPU mining have both flooded the used GPU market, which in turn has affected demand for new GPUs. During Nvidia’s latest earnings call, CEO Jensen Huang complained about “excess inventory” of RTX 3000-series GPUs that caused him to miss his quarterly revenue projections by $1.4 billion.

For Nvidia’s part, its public stance can be summed up as “so long and good luck.”

“We’ve had a great partnership with EVGA over the years and will continue to support them on our current generation of products,” Nvidia spokesperson Bryan Del Rizzo told Tom’s Hardware. “We wish Andrew [Han] and our friends at EVGA, all the best.”

The end of the EVGA-Nvidia relationship could also hurt Nvidia – Peddie says EVGA accounts for around 40% of Nvidia’s GPU market share in North America – but in the medium term the company is unlikely to be too confused. Nvidia has other partners, and despite the cooler design and clock speed differences, GPUs from the same series tend to perform the same regardless of which Nvidia partner actually made them. In other words, an RTX 3070 is an RTX 3070, and people who want one are just going to buy one from another company if EVGA’s products aren’t available.

EVGA will continue to sell its other products, including power supplies, although Han told Gamers Nexus that the company has no plans to return to the GPU market at all, neither with GPUs from AMD or EVGA. Intel, nor with future generations of GeForce products. Han also said that EVGA will continue to sell cards based on older GeForce GPUs, including the RTX 3000 series, until they run out of stock near the end of 2022. The company will also retain enough inventory of these cards to meet any warranty repairs or replacements for currently supported cards.

Kyle Orland contributed to this report

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