Nvidia Corp., the world’s largest supplier of discrete graphics processing units (GPUs), reportedly plans to reduce the number of its partners among graphics cards suppliers. Some other partners have either dropped exclusivity of Nvidia or are planning to do that. The effects of the decisions are not evident, but this may eventually lower Nvidia’s market share.

Earlier this year Palit Microsystems, which controls Gainward graphics cards supplier and also ships graphics boards under its own name, decided to start production of ATI Radeon-based graphics cards under both brands; effectively dropping exclusive relationship with Nvidia. In addition, ASK Technology, the company which controls InnoVision Multimedia (which is primarily known for its Inno3D-branded graphics cards powered by Nvidia GeForce graphics processors), recently established graphics card supplier called Force3D that has a range of ATI-powered add-in-boards.

According to news-stories by various web-sites (Fudzilla, The Inquirer, THG), Club3D and Foxconn are likely to stop selling Nvidia GeForce-based graphics cards. At present Club3D supplies both GeForce and Radeon graphics adapters, whereas Foxconn, which owns a stake in Leadtek Research graphics card vendor, has maintained Nvidia exclusivity. It is unclear whether Club3D and Foxconn decided to stop supplying Nvidia GeForce cards themselves, or Nvidia decided to cease relationships with the aforementioned companies.

It is interesting to note that contract maker Foxconn Electronics builds high-end Nvidia GeForce graphics cards. The destiny of Nvidia and Foxconn Electronics partnership are not clear at the moment.

The same media reports claim that EVGA and XFX are also considering to end their agreements to exclusively ship Nvidia-powered video cards. Both companies have been very loyal to Nvidia and enjoyed massive support from the Santa Clara, California-based GPU designer.

Earlier this year certain sources said that many add-in-card partners as well as distributors are displeased about Nvidia’s frequent new chip launches that decrease pricing of existing graphics cards and minimize profits. Another reason for disappointment of certain partners may be Nvidia’s Unilateral Minimum Advertised Price Policy (UMAP) initiative that restricts resellers to sell Nvidia-based products below certain price level.

Theoretically, lower number of AIB partners would mean lower market share of Nvidia. However, this will stabilize the company’s business as well as positions on the market.

Back in 2002 and 2003, when Nvidia’s GeForce FX product lineup was not strongly competitive against ATI Radeon 9000-series, many add-in-board partners, including Asustek Computer, stopped to exclusively supply Nvidia graphics cards. Nevertheless, nowadays Asustek Computer is still Nvidia’s largest customer and revenue of both companies have increased dramatically since 2003.

Tags: Nvidia, Geforce, Club3D, Foxconn, EVGA, XFX