Nintendo Co. has engaged Samsung Electronics Co. to produce the primary chips for its upcoming Switch 2 console, a strategic move that could enable Nintendo to exceed its sales target of 20 million units by March 2026.
This partnership represents a significant achievement for Samsung, which is striving to enhance its competitive stance against Taiwan Semiconductor Manufacturing Co. (TSMC) in the global chip market. Securing a contract for one of this summer’s most anticipated gaming devices is expected to bolster the utilization rates and overall business for Samsung’s semiconductor manufacturing facilities, according to sources familiar with the negotiations.
Currently, Samsung is developing a custom chip for the Switch 2, based on a processor design from Nvidia, utilizing its 8-nanometer manufacturing technology. The anticipated production rate is projected to support Nintendo’s goal of shipping over 20 million consoles by March 2026, with the potential for increased output should the need arise, dependent on the capacity available at assembly partners like Foxconn Technology Group.
This collaboration comes at a time when Samsung, already a supplier of memory chips and displays for Nintendo, is working to improve its position in the contract chip-making industry, where it has faced challenges in matching TSMC’s dominance. The recent agreement, first reported by Chosun Biz, signifies a positive step for Samsung’s chip division, which aimed to establish itself as a vital component of the wider semiconductor business alongside its memory product lines.
Meanwhile, TSMC has continued to expand its market lead by attracting high-profile clients, including Apple Inc. and Nvidia, through consistent quality improvements and dependable large-scale manufacturing. Both companies are engaged in an ongoing effort to advance their production processes to accommodate increasingly smaller chip architectures, with an emphasis on enhancing yield from 2-nanometer technologies to improve profitability and product excellence.
A spokesperson for Nintendo declined to comment on the company’s suppliers or provide specific production details beyond statements made by President Shuntaro Furukawa during recent earnings calls. Nintendo’s sales forecast for 15 million units considered the financial impact of tariffs, but Furukawa emphasized that it did not reflect potential supply constraints. Representatives from both Samsung and Nvidia also chose not to comment on the partnership.
Historically, Samsung has been a key partner for Nintendo, supplying NAND flash memory and OLED displays for the Switch. The Korean manufacturer has advocated for the incorporation of OLED panels in any future refresh of the Switch 2, according to informed sources.
The original Switch, launched in 2017, utilized chipsets manufactured by TSMC, employing older fabrication technologies. However, Nintendo’s shift to Samsung for the new device’s Nvidia-based chipset aligns with the optimization for Samsung’s manufacturing capabilities, according to insiders.
This transition could benefit Nintendo, as it may alleviate the need to secure chip production capacity from TSMC, which has been highly sought after by numerous tech companies.
For Nintendo, ensuring sufficient production of the Switch 2 has proven challenging, particularly as the company anticipates it will become one of the fastest-selling consoles ever. The gaming giant is counting on the Switch 2 to facilitate a crucial transition from its eight-year-old original model, thereby reigniting growth following stagnant profit margins in recent years.
This year, Nintendo has expressed regret for its inability to accommodate more pre-orders for the Switch 2, receiving 2.2 million applications in Japan alone. Efforts to increase production of the Switch 2 began even before pre-orders opened, with Nintendo urging its suppliers to intensify production to meet strong demand.
Earlier in the month, Nintendo projected that shipments of the Switch 2 would reach approximately 15 million units by March. This estimate falls slightly short of the 16.8 million units average forecast by analysts collected by Bloomberg. Nintendo’s initial goal was to replicate the launch success of the original Switch, which sold around 15 million units within its first ten months after release, prompting analysts to assess the potential for sales to exceed that benchmark.
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(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
