EVGA ends NVIDIA partnership...

[watzup_ken]

wow nvidia really deserves its reputation as the shittiest company to work with.
1. played out MS for Xbox gpu
2. burn bridge with Apple
3. burn bridge with BFG, XFX and now the biggest partner of all..EVGA
4. burn bridge with Sony over PS3 gpu

on a side note, ARM will get screwed long term thanks to the attempted takeover by Nvidia, some of the ARM customers are working to transit from ARM to RISCV in the long run to prevent themselves being held hostage by a competitor

they are the next 3dfx

This news basically brings forward the fact that Nvidia is a very difficult company to work with. While AMD may not have the best GPU in comparison, you can clearly tell the trend that almost all are happy going to AMD or sticking around with them for some bespoke solutions.

 

[beng035]

i am in the red team for the longest

 

[KYZT2021]

Also Nvidia strong arm on price limits and it own FE affecting AIB too, but remember when Boom arh the sky is da price

 

[watzup_ken]

They only said lower margins, they didn't say whether it is absolute figure. Until they give actual figures, there's no context to it. It could reasonably mean either. Given that gpu makes up 80% of their revenue, I'm more inclined to believe that the majority of their profit also comes from gpu even if it isn't the same %.

EVGA makes a lot of stuff other than gpu as well. They make amd mobos too. As for the point about other companies making amd gpus as well, then it would beg the question, why is evga not switching to amd or intel then? Why completely drop from the GPU business?

GN pointed out that nvidia imposes price floors and caps for gpus. ASUS is not exempted from it but they they don't seem to have the same issue as evga. I believe many would disagree about ASUS being higher quality, there are a lot of argument about it being overpriced due to just the branding itself. GN also mentioned that evga supposedly wanted to go for higher end AIB and cooling solutions for their GPUs but nvidia's price caps made it hard for them to do so. If ASUS is indeed putting out better quality for their high end, then it's weird that they are not that bothered about the price cap but evga is.

Perhaps the biggest contradiction coming from evga is that they claim(@ 08:19) that it ISN'T A FINANCIAL DECISION yet they only state financial ones. What gives?

To top it off, even GN is SKEPTICAL of evga's reasons and they believe that the real reason is because they ordered too many during the crypto boom.

If you think that their reasoning don't make sense, then that may not be the main reason. But considering that this is a very material decision to exit a key business, the reason must be a very strong one. GPU pricing has been an issue for some years now, and we have heard about some manufacturers complaining about this with the launch of Ampere. It is the boom of crypto that sent prices soaring and thus, alleviating the price/ margin issue. But now that we are back to the norm, margin is going to tumble and manufacturers unhappy.

 

[uselessbum]

If you think that their reasoning don't make sense, then that may not be the main reason. But considering that this is a very material decision to exit a key business, the reason must be a very strong one. GPU pricing has been an issue for some years now, and we have heard about some manufacturers complaining about this with the launch of Ampere. It is the boom of crypto that sent prices soaring and thus, alleviating the price/ margin issue. But now that we are back to the norm, margin is going to tumble and manufacturers unhappy.

Then the reason would be the crash of the crypto boom, not the low margins per se. That's to say, they(or evga specifically) missed out on it due to the supply crunch.

At least I don't believe it to be so bad to justify axing the whole division(along with the people). Otherwise other companies would be following suit as well. Also, why not switch over to amd GPUs then? XFX is one such example. They used to sell nvidia cards only but they eventually became disillusioned with nvidia and started making amd(ati) cards too, eventually dropping nvidia and only making amd ones.

It should also be noted that GN pointed out that EVGA categorically stated that this decision IS NOT a financial one. So it does not make sense for financial related reasons to be the main ones responsible for it.

My belief is that there are unspoken personal(ie non-financial) reasons that drove this decision. The financial ones are just minor excuses that reinforced(ie sealed) it.

 

[Koenig168]

It's not that there is not enough margin in the GPU business but rather who is getting the lion's share of the margin.

This chart (source: Anandtech) is pretty self-explanatory.

 

[celsus]

It seems they just wisely step away from GPU market right as it is about to go through a crash... maybe not as much to do with NVidia as they claim but they couldnt help take a postshot at them on the way out

 

[watzup_ken]

Then the reason would be the crash of the crypto boom, not the low margins per se. That's to say, they(or evga specifically) missed out on it due to the supply crunch.

At least I don't believe it to be so bad to justify axing the whole division(along with the people). Otherwise other companies would be following suit as well. Also, why not switch over to amd GPUs then? XFX is one such example. They used to sell nvidia cards only but they eventually became disillusioned with nvidia and started making amd(ati) cards too, eventually dropping nvidia and only making amd ones.

It should also be noted that GN pointed out that EVGA categorically stated that this decision IS NOT a financial one. So it does not make sense for financial related reasons to be the main ones responsible for it.

My belief is that there are unspoken personal(ie non-financial) reasons that drove this decision. The financial ones are just minor excuses that reinforced(ie sealed) it.

I feel (and I may be wrong) that the reason is more about working with Nvidia, which at the end of the day, affects them financially. So the issue is less of money, though it does impact them financially. For some companies, there may be reasons why they want to stick around,
1. Big companies like Asus, Gigabyte and MSI clearly wants to offer products where they can complement each other. For example, MSI wants to sell GPUs from popular brands because when people buy a motherboard/ PC, they will also need things like PSU, RAM and GPU, which they can offer, instead of letting their competitors earn. The profit margin may not be great, but again, it helps not letting potential profit go to competitors.

2. Some brands are only focuses on GPUs. Think Gainward/ Palit, Leadtek, Inno3D, etc. It is not going to be easy for them to stop selling Nvidia GPUs because they produce Nvidia GPUs exclusively, with almost no other products that they can fall back on. EVGA's main business may be GPUs, but they have also built a decent reputation offering other products, so it is clearly not a death sentence to them, as compared to say Inno3D.

 

[watzup_ken]

It's not that there is not enough margin in the GPU business but rather who is getting the lion's share of the margin.

This chart (source: Anandtech) is pretty self-explanatory.

No surprises there. That's why Nvidia has grown into a massive company over the years, yet at the same time, AIB are complaining that Nvidia is trying to bankrupt them.

 

[uselessbum]

I feel (and I may be wrong) that the reason is more about working with Nvidia, which at the end of the day, affects them financially. So the issue is less of money, though it does impact them financially. For some companies, there may be reasons why they want to stick around,
1. Big companies like Asus, Gigabyte and MSI clearly wants to offer products where they can complement each other. For example, MSI wants to sell GPUs from popular brands because when people buy a motherboard/ PC, they will also need things like PSU, RAM and GPU, which they can offer, instead of letting their competitors earn. The profit margin may not be great, but again, it helps not letting potential profit go to competitors.

2. Some brands are only focuses on GPUs. Think Gainward/ Palit, Leadtek, Inno3D, etc. It is not going to be easy for them to stop selling Nvidia GPUs because they produce Nvidia GPUs exclusively, with almost no other products that they can fall back on. EVGA's main business may be GPUs, but they have also built a decent reputation offering other products, so it is clearly not a death sentence to them, as compared to say Inno3D.

I can see where you are coming from but it still doesn't square up with their decision.

If the issue is about working with nvidia, then why not switch over to AMD like what former nvidia loyalist XFX did? Or even intel?

It may not be a "death sentence" for the entire company it is likely one for most of it because most of their staff are from the GPU division. IMO, this should not be done unless there is really no way out of it. IMO, it is too casual of a decision to make.

EVGA sells other things like PSU and mobo. Then wouldn't the reason you stated in 1 apply to them as well? IE sell gpu from popular brands to complement their other products even if gpu margins are low.

 

[TanKianW]

That is the problem with one company (Nvidia) leading the market. Just like Intel without AMD. Stuck at 4-cores for the longest time.

Imagine earlier if their ARM deal go through......all gg.

Nvidia is famous in the industry for being a dictator.....coz no one can stop them. Even AMD is still playing catch up, ARC likely will be abandoned due to Intel poor financial performance or bug by software (driver) compatibility for at least 2-3 years. Nvidia's main goals are to satisfy its investors. Treating the gamers community well or being reasonable to their AIB partners had never been part of their plan.

They are aggressively pushing on AI/ML, they already know where the milk and honey are. Just need to tide over this crypto mining crash period, excessive GPU inventory crisis then continue to milk their partners and consumer dry.​

 

[uselessbum]

The irony is that Nvidia themselves may eventually voluntarily exit the gpu market(at least gaming wise) to concentrate on AI/ML. Their CEO has shown an increasingly cold shoulder towards the gpu market. All Jensen could seemingly talk about nowadays is AI/ML. Which would explain their increasingly fraught relationship with their AIB partners.

 

[AZE]

The irony is that Nvidia themselves may eventually voluntarily exit the gpu market(at least gaming wise) to concentrate on AI/ML. Their CEO has shown an increasingly cold shoulder towards the gpu market. All Jensen could seemingly talk about nowadays is AI/ML. Which would explain their increasingly fraught relationship with their AIB partners.

Don't think they will abandon game market.
But the focus will be inverted.
In the past it was that the architecture was designed with being the best in gaming in mind, with datacenter and other markets as side markets built on the former's success.

In the future it will more rikely be that the architecture be 1st designed around being the best in datacenter needs, and then the architecture be adopted and tuned for gaming.

 

[TanKianW]

Don't think they will abandon game market.
But the focus will be inverted.
In the past it was that the architecture was designed with being the best in gaming in mind, with datacenter and other markets as side markets built on the former's success.

In the future it will more rikely be that the architecture be 1st designed around being the best in datacenter needs, and then the architecture be adopted and tuned for gaming.

DC margins will/may continue to rise the next few years but it is cyclical too. Most DCs will not tech refresh every year until they ROI with what they had. In between will be replacement and maintenance, or unless there is great breakthrough in tech (challenges as we get smaller in nm during fabrication). Nvidia just need to time it right (+charging premiums) when major DC players go shopping.

Nvidia has been pushing CUDA and their developer platforms (Jetson) to the community for quite a while now. Time to see how they going tp reap rewards for their huge effort put in moving forward. Hard truth: no love for gamers/pc builders here. No matter how much Jensen tries to sell his raytracing tech which is a time stalling game that continues to empty gamers pockets.​

 

[AZE]

DC margins will/may continue to rise the next few years but it is cyclical too. Most DCs will not tech refresh every year until they ROI with what they had. In between will be replacement and maintenance, or unless there is great breakthrough in tech (challenges as we get smaller in nm during fabrication). Nvidia just need to time it right (+charging premiums) when major DC players go shopping.

Nvidia has been pushing CUDA and their developer platforms (Jetson) to the community for quite a while now. Time to see how they going tp reap rewards for their huge effort put in moving forward. Hard truth: no love for gamers/pc builders here. No matter how much Jensen tries to sell his raytracing tech which is a time stalling game that continues to empty gamers pockets.​

GPGPU stuffs hab been a thing since more than 15yrs ago. If the competition have not caught up, it ish nothing but their own fault.

And ray tracing potential ish huge.
More rike those companies that don't do that are stalling for time.

Game ray tracing tech are using just buy a small fraction of the real ray tracing capabilities used in pro graphics. The step forward should be creating real time high frame rate pro graphics indistinguishable from real life, in games or otherwise.