EKWB reportedly plagued with financial disarray — many employees and suppliers were allegedly left unpaid for as long as four months

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EK Cooling allegedly has slipped itself into a hot soup of seemingly endless financial woes, where it has not paid its staff, suppliers, and contractors for many months as the company is facing liquidity problems and a surplus of inventory left unsold, stuck in the warehouse for a more extended period. Gamers Nexus investigated these claims made by former and current personnel, where he found trails of unpaid bills lasting as long as three to four months and unpaid raises that accumulated for almost a year.

The investigation first highlights suppliers who claimed not to be paid over four months. Dan Henderson is one such person who took to LinkedIn to share his experience, highlighting the challenges he faced during his time with the company. EK responded to this by sending Dan a cease and desist letter for expressing his requirement to get paid like many others who weren't as vocal. To emphasize the scale of this mismanagement, Dan isn't the only person who shares this similar story. Some haven't received their commissions despite promises and cases where overtime hours have been shaved off despite serving the time.

The Endless Purchasing Loop and Unsold Inventory

EK Water Blocks has two entities—a Slovenian-based headquarters and a US-based subsidiary, EK Cooling Solutions. Steve narrated the series of events in detail, stating that the company was reportedly irresponsible and negligent regarding payment. Consequently, partners and employees are forced to share the burden of alleged mismanagement. It all begins with its extensive range of products, leading to a surplus of goods. EK has over 230 water blocks, 40 liquid cooling kits, 85 reservoirs, 40 pumps, 73 radiators, and 212 miscellaneous accessories.

EK does not own all its manufacturing facilities and outsources the task. The companies tasked with manufacturing take orders on a minimum order quantity, which leads to EK ordering items that take a lot of time to sell. Hence, the company ends up with unsold surplus goods worth millions of dollars in its warehouse while being in a situation where it cannot pay bills amounting to five figures. Eventually, suppliers conduct business with EK when there is an upfront payment rather than a line of credit.

Selling specialized liquid-cooled items is challenging and time-consuming, even for well-known manufacturers. For example, a retailer could allegedly sell only two units of its Asus ROG Maximus Z790 waterblock. Another retailer purportedly said EK's revenue fell by 32% in one year, making it extremely difficult to sell all of its minimum order quantity. Above all, EK products are costly, making their products more inaccessible to many buyers within this niche ecosystem.

Internal Bickering and Accusations of Theft

While the non-payment of all personnel is terrible enough, the company has communication issues, which lead to both divisions engaging in petty squabbles and name-calling, and they accused each other of theft. These problems need to be handled with good communication and excellent care, something EK desperately needs to implement. EK has reportedly not paid franchise tax to the State of Texas and has closed its office and warehouse, which employees learned about when it reached the location.

Steve also said that the company has been scrambling to make payments once it caught wind of this investigation. The company is also selling one of its buildings to pay its debts and has sold workstations and prebuilt gaming PC systems under the names 'EK Fluid Works' and 'EK Fluid Gaming' that's outsourced to SwiftTech with hopes of getting a positive cash flow. However, it was further highlighted that despite this, complaints about missing high-value inventory had prompted the threat of involving authorities who would search employees' households. However, this was not pursued further at the time.

The main issue is that EK lacks communication with its personnel—both current and former—employees and contractors. Having its lawyers send a cease-and-desist letter, even if it involves one person, is counterproductive and harmful, as many with the same need to be paid. It also doesn't help when a company with multiple financial obligations has booked a booth at Computex 2024, which costs a significant premium for a company that allegedly encouraged a culture of economic mismanagement.

Ultimately, EK needs to address its inability to communicate with its personnel first, halting many steps that led to financial mismanagement. Many companies make terrible financial decisions, leading to a complete collapse. EK is a well-known company for its niche-specific liquid cooling products. However, the burden of financial disarray causes significant damages; it will take nothing short of a miracle to fix many of these issues.

Freelance News Writer
  • gg83
    I really don't think "communication" was the problem. I always asked myself how this company can turn a profit. Pc modding is a very small market. Their products look amazing but very expensive.
    Reply
  • CactusBuilder
    Not only were they a very low volume producer, but I find it absolutely mind boggling that they didn't have standardized parts for near every product.

    EK has over 230 water blocks, 40 liquid cooling kits, 85 reservoirs, 40 pumps, 73 radiators, and 212 miscellaneous accessories.

    How do you have 73 different radiators? You have a 120mm, 240mm and 360mm. That's it. Maybe you make a one-off custom thin design in partnership with an HTPC case builder, where all parts are guaranteed sold to the case builder.

    40 pumps? I can use the same water pump for a fish tank, may cat watering bowl, and to grow seedlings. Maybe you resell two pumps (a high flow and a low/medium flow) that someone else manufactures for pennies and you slap your name on it.

    85 reservoirs that should cost literally a penny a piece in bulk, as would the rest of the misc accessories.

    The only possible one that would be difficult to have someone else mass produce for you would be the water blocks since they need to be 100% water tight. However every air cooler I have bought over 30+ years of building computers has come with adapters to fit a half dozen different Intel/AMD sockets, and with the advent of AIO's showing you can essentially put the water block on the CPU and never touch the tubes attaching to either end, these too should have just required a 10 cent adapter.

    I'm guessing they
    Got in over their head trying to make these stupid expensive $800 motherboards that just cool down VRMs (big woop)
    Got their lunch eaten when people stopped building their own water cooling setups and just went with a simple and safe AIO.
    It's unfortunate, EK was AFAIK the trusted name in water cooling, and with Intel's absurd power usage they should be killing it right now. I'm just surprised they couldn't tell their suppliers they cannot afford to have 1000 part minimum orders (or even 250). There's simply not enough people who spend that kind of money on their setups and those who do usually hold onto them for a couple of years.

    Hopefully either the company can recover or the engineers move to a more stable company. Water cooling isn't going anywhere, especially in the datacenter arena. Maybe the consumer market just isn't large enough to support itself.
    Reply
  • Notton
    CactusBuilder said:
    How do you have 73 different radiators?
    It's when you overspecialize for every niche case.
    I would assume 120mm *2 and *3 (240mm and 360mm) is the most popular size
    Followed by 140mm *2 (280mm, which offers roughly similar performance to a 360mm)

    but then there are many niche sizes
    40mm (for 1U servers)
    50mm
    60mm
    80mm
    92mm
    140mm*3 (420mm)
    180mm (Some Fractal Design and Silverstone cases use this fan size)

    There is radiator thickness. 25mm being the de-facto standard. A thicker option would be 32mm~38mm.
    There is also fin density. Some lower noise applications might prefer lower fin density with high airflow fan. High performance may prefer high density with high static pressure fan.
    Finally, there is inlet/outlet layout. The most common design has both on the same side, but some have it on opposite ends.
    Reply
  • RolandOlifant
    gg83 said:
    I really don't think "communication" was the problem. I always asked myself how this company can turn a profit. Pc modding is a very small market. Their products look amazing but very expensive.
    exactly; very niche and precarious market.
    Reply
  • gg83
    CactusBuilder said:
    Not only were they a very low volume producer, but I find it absolutely mind boggling that they didn't have standardized parts for near every product.



    How do you have 73 different radiators? You have a 120mm, 240mm and 360mm. That's it. Maybe you make a one-off custom thin design in partnership with an HTPC case builder, where all parts are guaranteed sold to the case builder.

    40 pumps? I can use the same water pump for a fish tank, may cat watering bowl, and to grow seedlings. Maybe you resell two pumps (a high flow and a low/medium flow) that someone else manufactures for pennies and you slap your name on it.

    85 reservoirs that should cost literally a penny a piece in bulk, as would the rest of the misc accessories.

    The only possible one that would be difficult to have someone else mass produce for you would be the water blocks since they need to be 100% water tight. However every air cooler I have bought over 30+ years of building computers has come with adapters to fit a half dozen different Intel/AMD sockets, and with the advent of AIO's showing you can essentially put the water block on the CPU and never touch the tubes attaching to either end, these too should have just required a 10 cent adapter.

    I'm guessing they
    Got in over their head trying to make these stupid expensive $800 motherboards that just cool down VRMs (big woop)
    Got their lunch eaten when people stopped building their own water cooling setups and just went with a simple and safe AIO.
    It's unfortunate, EK was AFAIK the trusted name in water cooling, and with Intel's absurd power usage they should be killing it right now. I'm just surprised they couldn't tell their suppliers they cannot afford to have 1000 part minimum orders (or even 250). There's simply not enough people who spend that kind of money on their setups and those who do usually hold onto them for a couple of years.

    Hopefully either the company can recover or the engineers move to a more stable company. Water cooling isn't going anywhere, especially in the datacenter arena. Maybe the consumer market just isn't large enough to support itself.
    Lmao! Great breakdown! That really puts it into prospective. I bet Corsair will end up buying ek for pennies.
    Reply
  • durahl
    CactusBuilder said:
    40 pumps? I can use the same water pump for a fish tank, may cat watering bowl, and to grow seedlings. Maybe you resell two pumps (a high flow and a low/medium flow) that someone else manufactures for pennies and you slap your name on it.
    Check their Pump Shop and you'll see 2 pages each listing about 20 items consisting of a bunch of Pumps AND accessories for those few pumps. Same for the 230 Waterblocks which also include their Spare Parts - Classical sensationalism Journalism.
    Reply
  • woe2you
    That was a whole lot of unnecessary words, you could have just said "I know nothing about watercooling" and left it there.

    CactusBuilder said:
    You have a 120mm, 240mm and 360mm. That's it.

    120mm, 240mm, 360mm, 480mm, 140mm, 280mm, 420mm, 560mm in three different thicknesses, U-flow and X-flow and two different colours

    CactusBuilder said:
    40 pumps? I can use the same water pump for a fish tank, may cat watering bowl, and to grow seedlings. Maybe you resell two pumps (a high flow and a low/medium flow) that someone else manufactures for pennies and you slap your name on it.

    Watercooling mostly uses Xylem D5 and DDC pumps, of which there are several SKUs. They're not cheap, but trusting a cheap POS pump to cool hardware worth thousands is an astoundingly stupid idea.

    I'd also like to live in your world where low volume CNC machined parts cost pennies. Maybe I just haven't smoked enough crack.
    Reply
  • TEAMSWITCHER
    I have two PC's in my home .. one is a completely irrational $5000+ monster Ryzen Threadripper + RTX 3080 machine with full EK water cooling. The other is a far more sensible all air cooled design in a decent air-flow case. I can say emphatically that water-cooling looks fantastic but ... air cooling is better

    Air cooled PC's are far easier to build - far cheaper also .. and can be upgraded more frequently. There are so many good air-flow cases now and M.2 storage that eliminates cable clutter.
    Reply
  • TechLurker
    I find it wilder that EK has been increasingly outsourcing their products, and is also probably how Swiftech hasn't died itself. I do wish Swiftech would make a return with their X3 AIO and combo rad/pump/res options.

    That aside, I'm wondering if some of their other outsource partners might be the same OEMs behind Bitspower and Barrow, given the increasing similarity of some of their rads. Maybe Hardware Labs too (they used to be the OEM for some of Bitspower's radiators, before they started making most of them in-house).
    Reply
  • drivinfast247
    gg83 said:
    Lmao! Great breakdown! That really puts it into prospective. I bet Corsair will end up buying ek for pennies.
    God, I hope not!!

    Edit: Actually, now that I thought about it for a bit that may not be so bad.
    Reply