Winners & losers: EVGA's 2022 exit from Nvidia graphics cards remains one of the industry's most striking partner breakups, and this first-hand account shows how the relationship worked day to day. Hedrick describes a company squeezed by Nvidia's Founders Edition cards, pressure to keep a loss-making entry model and tight control over launch information, all in a business that made up 78% of EVGA's sales. It's only one side of the story, though. Nvidia's CEO and outside reports point to EVGA's own strategy and costs.
EVGA announced in 2022 that it would stop making Nvidia graphics cards, blaming the decision on what it described as an abusive relationship. Now, former EVGA Product Manager Brendon Ray Hedrick has shed more light on why that happened, including having to compete against Nvidia's own Founders Edition cards.
In a lengthy personal account, Hedrick, who worked at EVGA between 2016 and 2019, recalls the concern when Nvidia introduced its Pascal Founders Edition cards: the company supplying EVGA's chips was increasingly competing for the same customers.
According to Hedrick, EVGA needed a model at Nvidia's advertised starting price, even if it lost money. Failing to offer one could jeopardize GPU allocations, though he says identifying the reason for a reduction was difficult.
"We needed to keep a loss leader – a card we sold at a loss – to keep Nvidia happy and protect our access to the chips," he writes.
That left pricier custom cards to generate profits. But as Nvidia improved its designs and automatic clock management, Hedrick says spending more on EVGA's circuitry and cooling delivered increasingly modest gaming gains. The cheaper models, meanwhile, were frequently sold out.
There were also issues with launch preparations. Hedrick recalls learning GTX and RTX specifications at the same time as the public. "Nvidia was fiercely protective of its announcements, and I remember how angry it could become with partners over information that leaked before an official reveal," he said.
To catch the culprits, different colored dots were used on retailer images to trace leaks. "If an image leaked and Nvidia came back to us, we could identify which retailer had originally received that image set," Hedrick explains.
By September 2022, the financial squeeze had reached a tipping point. As reported when EVGA announced its departure, the company said it was losing hundreds of dollars on RTX 3080 and RTX 3090 cards following price cuts. It also complained about discovering final suggested prices at Nvidia's public announcements and having limited freedom to set its own.
At the time, CEO Andrew Han insisted the move was about principle rather than money, following unsuccessful attempts to renegotiate the partnership.
The decision meant abandoning a business that accounted for 78% of EVGA's sales. EVGA nevertheless ruled out making AMD or Intel cards, expanding into new product categories, or selling the company. It said existing graphics card owners would retain warranty support.
But there was another side to the story. An Igor's Lab report blamed some of EVGA's margin problems on outsourcing circuit boards and coolers. It estimated EVGA's margins at around 5%, against roughly 10% for competing manufacturers. Longer warranties and the Step-Up upgrade program also added costs.
Nvidia CEO Jensen Huang had his own explanation for the split. He claimed EVGA boss Andrew Han had wanted to wind down the business for several years. Huang praised the partnership and suggested Han was ready to pursue something else.
"Andrew and EVGA are great partners, and were great partners, and I'm sad to see them leave the market," Huang said.
Former EVGA manager reveals how Nvidia's Founders Edition cards helped drive the company out of GPUs
