Macronix, a key supplier of memory chips for Nintendo Switch and Switch 2 cartridges, is exiting the gaming market. The company reported that its ROM production has effectively ended as it shifts focus to more profitable memory types.
Over the past year, Macronix saw a 39% decline in ROM output, with this segment now accounting for only 5% of its business. The company is reallocating its monthly capacity of 25,000 300mm silicon wafers to NOR, NAND, and eMMC memory production.
Expanding production capacity would require an investment of $1.2 billion and at least one year. Consequently, Nintendo must now seek alternative suppliers, such as Rohm or Lapis Semiconductor, to maintain its physical game distribution.
Nintendo has confirmed it will continue producing physical cartridges. However, the reduced supplier base could drive up manufacturing costs and retail prices. Nintendo has already begun pricing some physical game editions higher than their digital counterparts.
Digital sales are becoming increasingly significant for Nintendo, representing 61.5% of software revenue in the second quarter of 2026. This shift in consumer behavior may mitigate the impact of rising production costs for physical media.
