Macronix, Nintendo's main ROM chip maker, says ROM production has reached its end
For years, the AI industry's demand for memory and storage has pushed up prices and cut availability of PC parts such as RAM, SSDs and GPUs. According to Ars Technica, those shortages are now also squeezing the supply of ROM chips that power physical Nintendo Switch and Switch 2 game cartridges.
Chip manufacturer Macronix announced in its third-quarter earnings report that its production of ROM chips "has reached its end" and that it will begin "gradually decoupling from the game industry." The announcement was reported by the Taiwanese news site BigGo Finance. Ars Technica says this could be an issue for Nintendo, because analyst David Gibson notes that Nintendo uses Macronix as its "main memory chip maker" for physical game cartridges.
The numbers show how far ROM has fallen in Macronix's business. ROM production has shrunk 39 percent in the last year and now represents just 5 percent of the company's business. Macronix said it is being crowded out by more lucrative, in-demand chips such as NOR- and NAND-based memory and eMMCs.
Capacity is the constraint. Macronix's production capacity is stuck at 25,000 12-inch wafers a month, and $1.2 billion in planned new capacity will take a year or more to spin up. Until then, less profitable ROM chips take up wafer space that could earn more through other types of chips.
Key facts
- Macronix said in its third-quarter earnings report that its ROM chip production "has reached its end" and that it will gradually decouple from the game industry, as reported by BigGo Finance.
- Analyst David Gibson notes Nintendo uses Macronix as its "main memory chip maker" for physical game cartridges, so Ars Technica says the move could be an issue for Nintendo's Switch and Switch 2.
- Macronix's ROM production has shrunk 39 percent in the last year and is now 5 percent of its business.
- Macronix says ROM is being crowded out by more lucrative NOR- and NAND-based memory and eMMCs.
- Capacity is stuck at 25,000 12-inch wafers a month, with $1.2 billion in planned new capacity taking a year or more to spin up.
Why it matters
The AI memory squeeze, so far felt mostly in PC components like RAM, SSDs and GPUs, is now reaching a different product: the ROM chips inside physical Nintendo Switch and Switch 2 cartridges. The mechanism is wafer space. With capacity fixed, a low-margin ROM chip competes against NOR- and NAND-based memory and eMMCs that earn more.
Who it affects
Nintendo is the most exposed party, since analyst David Gibson notes it uses Macronix as its "main memory chip maker" for physical game cartridges. Owners and buyers of physical Switch and Switch 2 games sit downstream of that supply chain. Macronix itself is shrinking a business line that is already 5 percent of its total.
How to use it
There is nothing to adopt here; this is a supply-chain development. The practical reading is to watch for Nintendo's response and for any word on cartridge supply, neither of which is in the report.
How solid is it
The core claim comes from Macronix's own third-quarter earnings report, as relayed by the Taiwanese news site BigGo Finance and then by Ars Technica. The 39 percent decline, the 5 percent share, the 25,000 wafers a month and the $1.2 billion figures are as the article states them. The link to Nintendo rests on an analyst's description of Macronix as its main memory chip maker, and the "could be an issue" judgment is Ars Technica's own.
Risks and caveats
Nintendo's response or any statement from Nintendo is not given. No timeline beyond "gradually" is given for when Macronix will stop supplying ROM chips. Nothing is said about alternative suppliers, or about effects on cartridge prices or availability. The share of Nintendo's ROM supply that comes from Macronix is not quantified. The source does not say the $1.2 billion of new capacity is for ROM chips. No calendar date is given for the earnings report.
“has reached its end”
— Macronix, third-quarter earnings report, on its ROM chip production