Galax Fades Away: AI Disrupts the Graphics Card Market

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Key Takeaways

1Galax, a Hong Kong-based graphics card manufacturer, is closing its doors after 30 years of operation, allowing Palit to take over.

2Galax's HOF brand, favored by overclockers for its unique white PCB, will continue under Palit's management.

3The reallocation of chips towards AI is reducing availability for gaming, leading to anticipated price increases in the market.

💡Why it matters — The closure of Galax illustrates the growing impact of AI on the tech industry, redefining the priorities of chip manufacturers.

Galax Closes Its Doors After Three Decades

The Hong Kong-based graphics card manufacturer, Galax, has announced the cessation of its global operations. This decision marks the end of an era for a company that began in 1994 under the name Galaxytech. Since 2013, it has operated under the name GALAX. Palit, which has been its parent company since 2008, will now take over all operations, including the management of the HOF brand, well-known among extreme performance enthusiasts for its distinctive white PCB.

In 1994, Galaxytech was established in Hong Kong, specializing in the assembly of graphics cards. After three decades, the company, rebranded as GALAX in 2013, has announced the dissolution of its global team. This information was confirmed by WCCFtech, which obtained details directly from the company's management.

Palit Takes the Helm

Palit Microsystems, already the owner of GALAX, is taking charge of all brand operations. A statement has been sent to customers to clarify this transition. Palit is committed to maintaining existing services, including after-sales support. Holders of GALAX or KFA2 graphics cards can continue to benefit from warranty services through Palit's RMA portal. Both brands remain authorized partners of NVIDIA, ensuring continuity of services for users.

Although Palit has owned GALAX since 2008, the dissolution of the operational entity marks a turning point. GALAX primarily operated in the Asia-Pacific, South America, and North America markets, while KFA2 was active in Europe. This restructuring is not a buyout but rather an internal reorganization that keeps intellectual property within the group. The HOF range, with its distinctive design, will continue to exist under Palit's umbrella, as confirmed by Back2Gaming after contacting NVIDIA Philippines and the local distributor.

Implications for the European Market

For French and European consumers, the future of KFA2 is a crucial question. Currently, KFA2 products are still available at French retailers, with models like the RTX 5070 1-Click OC offered starting at 769 euros on Materiel.net. Palit, now solely responsible for KFA2, is expected to ensure warranty continuity in the same manner as for standard Palit cards. In theory, this transition should not affect users' daily experiences, although the disappearance of GALAX reduces independent engineering capacity within the group.

The Impact of AI on the Graphics Card Market

In 2022, EVGA had already exited the graphics card market in September after a 23-year partnership with NVIDIA, citing reduced margins and perceived disrespectful treatment, particularly due to the Founders Edition. In 2026, the context is different for GALAX, which does not blame NVIDIA but is suffering the consequences of the massive reallocation of chips to AI-dedicated data centers. Palit explicitly mentioned "supply constraints related to AI demand" as the main reason for the closure.

The gaming graphics card market represents about 34.5% of the discrete GPU segment in 2026, according to Fortune Business Insights, a figure that has been declining for three years. The growing demand from servers and data centers is reducing the availability of chips for gaming, extending lead times and compressing margins. Experts anticipate price increases of up to 30% in certain segments by 2027-2028 due to the shortage of GDDR components.

Accelerated Consolidation

Market leaders ASUS, Gigabyte, and MSI dominate the sector, while niche brands like GALAX struggle to maintain profitable volumes. GALAX had managed to stand out with innovative models, such as the compact RTX 3070 LHR, ideal for Mini-ITX cases. KFA2, on the other hand, offered cards often priced 30 to 50 euros lower than ASUS or MSI references, a significant selling point in the French market.

The consolidation of the GPU market is not a new phenomenon, but the rise of AI is accelerating it in unprecedented ways. GALAX disappears as an autonomous entity, while KFA2 continues to appear in European catalogs. The question remains how long the contracting gaming market can support so many brands on its shelves.