Nvidia EMEA has decided to cut five of its partners and we heard from industry sources that buying chips from the gray market actually can be a better business than working directly with Nvidia.

The gray market is something that chip companies are trying to fight, since the existence of this industry. Let’s hypothesize, let’s say a big OEM manufacturer buys twenty thousand extra chips and simply flogs them to an unknown buyer. The XY company gets the chips for its cards and the OEM makes some money of that deal.

Europe Middle East and Africa (EMEA) is a tricky market, especially when you are selling the same product where the only difference in most of the cases is price. Selling Nvidia cards in EMEA business gets even tougher as you compete with Palit, Gainward and Leadtek, the companies that will always get the product very cheap.

We believe that some of these cut-five partners might defect to ATI and ATI could use some help from a strong and focused partner, as in reality only Sapphire and Power Color are strong enough and are focusing only on graphics. Usually the big motherboard guys are never focused enough on the graphics to make a huge impact, but most of them have a good and solid graphics sales.

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