Nintendo To Make 20% Fewer Switch Consoles Due To Chip Crunch (nikkei.com) 20
According to Nikkei Asian Review, "Nintendo will only be able to produce about 24 million units of its popular Switch game console in the fiscal year through March, 20% below an original plan." From the report: Its production has been held up by shortages of semiconductors and other electronic parts amid strong demand for Switch, including for its latest version released on Oct. 8. Nintendo's trouble is a reminder of the far-reaching impact of the global supply crunch that has affected a wide range of industries from autos to electronics to machinery.
The Kyoto-based company originally planned on producing a record 30 million Switch units on the back of rising demand for computer games triggered by the COVID pandemic, which has forced people to spend more time at home. However, production bottlenecks quickly emerged around springtime for key components including microcomputers. The company concluded it would have to revise down production targets as it was not able to secure enough supplies. Nintendo's suppliers have already been notified about the production cuts.
The Kyoto-based company originally planned on producing a record 30 million Switch units on the back of rising demand for computer games triggered by the COVID pandemic, which has forced people to spend more time at home. However, production bottlenecks quickly emerged around springtime for key components including microcomputers. The company concluded it would have to revise down production targets as it was not able to secure enough supplies. Nintendo's suppliers have already been notified about the production cuts.
Back in my day (Score:2)
The best excuse we used to be able to muster up was "dog ate my homework" .. nowadays though it's "because Covid."
Re:Back in my day (Score:4, Insightful)
I mean, was your homework dependant on an international supply chain with very little margins of fat, not suited to the disruption of restricted travel - sick workers - and 5 million dead?
Re: (Score:2)
Still, it's a better sounding excuse than "Our console is getting old, Sony and Microsoft are beating us on high end console gaming, and we're getting surpassed on casual low end gaming by smartphones."
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I would love it if Nintendo updating their hardware so every 2nd game didn't have slowdown - and I believe if they did a hardware refresh their numbers would go way up:
But reduced manufacturing does not appear to be based on reduced demand (granted these charts are a bunch of months behind).
Also I would guess that restricted supply chains play a big part in Nintendo not wanting to release new internals just yet.
https://www.statista.com/stati... [statista.com]
https://www.nintendo.co.jp/ir/... [nintendo.co.jp]
Re: Back in my day (Score:1)
Re: (Score:2)
I think only producing 80% of their desired console numbers was a smaller price to pay than Nintendo making their own chip manufacturing plants and stockpiles of the required materials.
Just In Time (Score:2)
How is that offshoring of technology and just in time manufacturing working out for you all?
Each country might have to accept that it's a good idea to have their own chip foundry even if it cuts into profit margins. Turns out these little flakes of silicon are used in everything, some of it vital to modern society.
Re: (Score:2, Insightful)
For those who made millions and billions on it, it worked out just fine.
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Or, we could improve supply chains and be friendlier with each other.
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Japan is a relatively small country. They can only house so much "on shore" manufacturing. Eventually, some components that they use in their companys' products may need to be manufactured elsewhere.
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companies', sorry
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Taiwan is literally 1/10th the area of Japan.
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And? Taiwan is not the only country from which Japan sources products!
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Running a foundry is extremely expensive. A modern day foundry costs tens to hundreds of billions of dollars. In the past, with older technology nodes sure, you could have a foundry for a few hundred million to a billion dollars.
The only way to keep them going is running them full tilt, and that's why we had supply issues still - Apple would make a new device and suck up all the RAM and now there's shortages. Or Apple bought cheaper chips and now the expensive ones are piling up in warehouses.
It is rumored
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I seem to remember every couple of years was an article about "too many x chips of one kind of another, losses mount for company X". It used to be flash, but it could also have been RAM or something else. ... for another maybe couple of years.
From the idea of a fab you get to making plans, delivery, contracts for water, electricity - maybe half a year... Then groundbreaking and basic construction for a year, and then fitting everything in - air filtering stages, cleaning, etching, vapour depositing,
Ramp up
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Running a foundry is extremely expensive.
It's also an extremely profitable business, else no one would run them. And my town wouldn't have 11 of them.
Also, foundries are not immune to supply issues either. They too are suffering from supply chain issues - the wafers the chips are made from are in short supply, as are the processing chemicals.
An interesting theory. Sadly it's not the current reason why chips are globally in short supply.
And yes, brokers are holding onto the chips trying to get as much as they can for their "investment".
In the old days we used to hire warehouses to hold our supplies for us. This is how my employer dealt with contracts for automotive and game console business. If we promised them 10 years of chips, we'd have paid someone to hold them in a crate. Once the 10 years are up we'd offer the remaining inventory t
Opinion (Score:2)
That house of cards is starting to lean... (Score:2)
Although in this case a small breeze kicked up (the pandemic), but with the same result.
Redundancy sounds expensive to everyone until you actually wish you had some redundancy.