GPUsNews

EVGA Ends Partnership with NVIDIA: RTX 40 Series GPU Too Expensive and Unprofitable to Produce?

Jon Peddie Research has shared the startling news of EVGA discontinuing its 22-year-long partnership with NVIDIA. The largest (and locally headquartered) AIB partner of NVIDIA’s GeForce offerings in North America, EVGA has been one of the leading manufacturers of graphics cards across the globe. With enthusiast-centric offerings such as its Kingpin flagship, it has long been a favorite of gamers and overclockers alike.

The primary reason for the fallout is the rapid decline in AIB margins. The above graph from JPR clearly illustrates this. Back in 2020, the gross margin for NVIDIA and its AIBs was >25% and >35%, respectively. Fast forward to the Ampere launch and the same has grown to a whopping 60% for NVIDIA and a rather dismal 10% or lower for board partners. The profit margins are expected to drop even more with the upcoming RTX 40 “Lovelace” series of graphics cards, to as low as 5%.

The reason behind the contrasting profit margins of the two partners largely boils down to the need for more and more complex PCBs and heatsinks to cool the 400W+ GPUs. Meanwhile, NVIDIA has been mainly supplying GPU dies whose production costs have grown too but nowhere as much as the rest of the components. The use of TSMC’s 5nm node for Lovelace will likely make a dent in NVIDIA’s margins but some of this will be passed onto both consumers as well as board partners.

Unlike its rivals, EVGA also makes higher-quality PCBs, overclocking, customer support, 48-hour RMAs, etc. Furthermore, the relationship between NVIDIA and EVGA started off as a partnership but devolved into a customer-seller arrangement where the latter is no longer consulted on future announcements, briefings, or price changes.

EVGA will continue to sell and support existing GeForce products while also maintaining enough inventory to support the 3-year product warranty. However, no future RTX GPUs will be manufactured.

Areej

Computer hardware enthusiast, PC gamer, and almost an engineer. Former co-founder of Techquila (2017-2019), a fairly successful tech outlet. Been working on Hardware Times since 2019, an outlet dedicated to computer hardware and its applications.
Back to top button