AI memory shortage hits Nintendo cartridges: major ROM chip supplier Macronix exits the gaming business
In its third-quarter earnings report, Macronix announced that ROM chip production "has reached its end" and that it will "gradually decouple from the gaming industry," while analyst David Gibson noted that it is the "main memory chip manufacturer" for Nintendo's physical game cartridges. Macronix's ROM business has shrunk 39% over the past year and now accounts for only 5% of its business, with capacity being squeezed by more profitable chips such as NOR, NAND memory, and eMMC. Its capacity remains at 25,000 12-inch wafers per month, and the planned additional $1.2 billion in capacity will take more than a year to begin production.
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For years, the AI industry's insatiable demand for memory and storage has had plenty of knock-on effects on the price and availability of PC components like RAM, SSDs, and GPUs. Now those shortages are 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 the company's production of ROM chips "has reached its end" and that it will begin "gradually decoupling from the game industry," as reported by Taiwanese news site BigGo Finance. That could be an issue for Nintendo, which analyst David Gibson notes uses Macronix as its "main memory chip maker" for physical game cartridges.
That ROM production—which has shrunk 39 percent in the last year and now represents just 5 percent of Macronix's business—is being crowded out by production of more lucrative, in-demand chips like NOR- and NAND-based memory and eMMCs, the company said. With Macronix's production capacity stuck at 25,000 12-inch wafers a month—and $1.2 billion in planned new capacity taking a year or more to spin up—less profitable ROM chips are taking up wafer space that can earn more through other types of chips.
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