Win-win situation is promising! Nintendo collaborates with Samsung to implement a "hardworking" Switch with a 2-core processor, aiming for 20 million units in shipments.

Nintendo has commissioned Samsung Electronics to assist in the production of the core chip for Switch 2, which is expected to significantly increase the production volume of the new gaming console, with sales expected to surpass 20 million units by March 2026, far exceeding expectations. Insiders revealed that this decision is of great significance to Samsung. Currently, Samsung is competing with Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR in the global electronic chip manufacturing field, successfully securing the order for Switch 2 chips, which is likely to increase the equipment utilization rate of the Korean company's chip foundry and further expand its business. According to sources who wish to remain anonymous, Samsung is currently using 8-nanometer technology to produce chips or processors customized for Switch 2 by NVIDIA Corporation (NVDA.US). The sources stated that based on the current production progress, Nintendo is expected to ship over 20 million units of Switch 2 by March next year. If necessary, Samsung can further increase production capacity, but this largely depends on the production capabilities of hardware assembly companies such as Foxconn. Samsung has previously supplied Nintendo with memory chips and display screens, but has always struggled to compete with Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) in the chip foundry field. This collaboration is a strong acknowledgment of Samsung's chip foundry business, which had hoped to develop as another pillar of Samsung's chip business alongside its memory business. In contrast, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has consolidated its leading position through continuous technological upgrades and stable large-scale production capacity, successfully attracting major customers such as Apple Inc. (AAPL.US) and NVIDIA Corporation. The competition between Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR and Samsung in the chip manufacturing field is intense, with both striving to increase production capacity on a smaller scale, currently competing for 2-nanometer technology to improve production yield and achieve dual enhancements in profitability and product quality. Nintendo spokesperson stated that the company will not disclose supplier information, and apart from President Shuntaro Furukawa's comments at the financial results briefing, will not reveal more production details. Nintendo expects Switch 2 sales to reach 15 million units, a figure that already considers the impact of billions of yen in tariffs on profits this year. However, Furukawa emphasized that this number does not take into account supply restrictions. Representatives from Samsung and NVIDIA Corporation declined to comment. For a long time, Samsung has been an important supplier to Nintendo, providing NAND flash memory and OLED screens for Switch. Another source stated that Samsung is also pushing for Nintendo to continue using its OLED panels in future updates of Switch 2. One insider pointed out that the chips for the Switch released by Nintendo in 2017 were manufactured using more mature technology by Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. However, the new Switch 2, which uses NVIDIA Corporation chips, has been optimized for Samsung's manufacturing system, leading Nintendo to choose to work with Samsung. The source believes that in the long run, this is favorable for Nintendo, as it means Nintendo does not have to compete with other companies for the production capacity of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. For Nintendo, this gaming console is expected to become the best-selling gaming console in history, so ensuring an adequate supply of Switch 2 to meet market demand has always been a major challenge. Nintendo hopes that Switch 2 will drive the company's once-in-a-decade product iteration and move away from the original Switch, which has been on the market for eight years and is experiencing stagnant growth. This year, Nintendo has apologized for not being able to accept more pre-orders for Switch 2, as the company received 2.2 million pre-order applications in Japan alone. Insiders revealed that Nintendo had already begun to increase production volume for Switch 2 before opening pre-orders, and had asked suppliers to accelerate production to meet strong market demand. Earlier this month, Nintendo stated that it expects Switch 2 shipments to reach 15 million units by March next year, lower than the analyst average expectation of 16.8 million units as summarized by Bloomberg. President Shuntaro Furukawa told reporters that the company's primary goal is to match the initial sales performance of the original Switch, which sold about 15 million units in the first 10 months after its launch in 2017. This statement has led analysts to believe that there is still room for growth in the sales of Switch 2.