Nintendo hands Samsung Foundry a big win with its Switch 2 console

Samsung Foundry has been struggling to win significant orders as of late, but Nintendo may have just handed it a big win. Samsung's contract chipmaking unit has struggled with yield issues on advanced nodes and that has kept major customers at bay.

As Nintendo finds stronger than expected demand for its Switch 2 console, it has reportedly turned to Samsung for chip production as it aims to sell more than the projected 20 million units of the Switch 2 by March next year.

Nintendo has a smash hit on its hands with the Switch 2, it's having to ramp up production dramatically to meet demand. The company revealed that it got 2.2 million pre-orders for the Switch 2 in Japan alone, apologizing to customers that it couldn't take more pre-orders.

It increased production even before taking pre-orders but the demand has been higher than expected. It now projects to hit 20 million units by March 2026 and that would require its entire supply chain to ramp up production.

Samsung has a longstanding relationship with Nintendo, supplying it flash memory chips and OLED displays. Previous reports have suggested that Samsung pushed for Nintendo to use its OLED panels in the Switch, which the Japanese giant has done.

The original Nintendo Switch's chipset was produced at TSMC but Nintendo has now pivoted to Samsung for the Switch 2 as its chipset was designed to be optimized for Samsung Foundry's manufacturing system. This works out well for Nintendo since it wouldn't have to jostle for capacity at TSMC and it would likely have got a better deal from Samsung Foundry.

Samsung is also in a position to further ramp up the supply of the Switch 2's chipsets if Nintendo finds there's more demand, it would only be constrainted by the capacity at hardware assemblers like Foxconn where the Nintendo console is ultimately put together.