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Nintendo President: There's No End in Sight to the Semiconductor Shortage

Nintendo President: There's No End in Sight to the Semiconductor Shortage - News

by William D'Angelo , posted on 10 May 2022 / 2,006 Views

Nintendo president Shuntaro Furukawa has said the chip shortage will continue to hurt Switch production as it looks like the shortages won't be ending anytime soon.

"There’s no end in sight to the semiconductor shortage at this point," said Furukawa via The Wall Street Journal.

Nintendo shipped 23.06 million Switch consoles for the 12 month period ending March 31, 2022 to bring lifetime shipment figures to 107.65 million units. This figure is a drop from 28.83 million Switch consoles shipped during the previous year.

Nintendo President: There's No End in Sight to the Semiconductor Shortage'

Nintendo has forecasted it will ship 21.0 million Switch consoles for the fiscal year ending March 31, 2023, as well as 210 million games. If Nintendo hits its forecast the Switch will ship 128.65 million units lifetime in March 2023 and 1.03 billion games.


A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel dedicated to gaming Let's Plays and tutorials. You can contact the author at wdangelo@vgchartz.com or on Twitter @TrunksWD.


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30 Comments
method114 (on 10 May 2022)

Probably the most honest answer I've heard about the chip shortage since it's started. Everyone tried to predict a dateyear and then it just goes by with the issue remaining.

  • +6
KrspaceT method114 (on 10 May 2022)

And hey, it is also a solid answer they can use if people nag about Switch-2 (We don't have the components to have that be economically feisable for ourselves or our partners and customers')

  • +1
gtotheunit91 method114 (on 10 May 2022)

I appreciate this answer unlike Intel’s CEO pushing the year back each time the question comes up lol

  • +6
Alistair method114 (on 10 May 2022)

problem can't get better until governments stop juicing the economy with inflation (and fake high employment) and excess demand, and lockdowns, and all that stuff

  • -5
Pemalite method114 (on 10 May 2022)

To be fair, a lot of people had tunnel vision... And probably expected the shortage to end once their bottleneck got resolved.
So they probably weren't wrong in their original assertions, but when you remove one bottleneck in production, the next bottleneck becomes readily apparent.

Either way, 2022 is the year when a chunk of those production limitations got lifted... Apple shifted to smaller TSMC fabs, freeing up 7nm production for consoles and PC components... And we are starting to see that in the PC space now with higher component availability at lower prices. (Plus the Crypto boom has cooled off for now reducing demand.)

Which is great.

But then shortages started to happen in things like Ram, NAND, Mosfets and more... Which is where Nintendo starts to get impacted as they are reliant on TSMC's 16nm process, which isn't as congested and "in-demand" as TSMC's 7nm.
However... Things like controllers and chipsets and various IC's are also now starting to migrate to 16nm from 28nm, which means Nintendo will start having competition in the 16nm plants.
For example, some AMD AM4 chipsets are actually built at 55nm by Asmedia... And future chips will definitely migrate to 16/14/7nm TSMC/Global Foundries processes.

Then you have the Ukraine war... Russia was a source for various resources that goes into chip manufacturing.
Taiwan's drought also impacted production, chip manufacturing is stupidly water intensive, so they had to truck in water.
Then you had various power failures in South Korea and the USA which wiped out a few hundred million worth of chips as well.

It's just been a series of supply/demand/manufacturing "events" that have created the current climate.
So in my eyes, and I have been consistent about this for years now... 2022 is when we get an alleviation of supply, which has started to occur, 2023 will continue that trend... And 2024-2025 is when allot of fabs will start to come online in various capacities that were planned in 2020 and earlier.

  • +7
SuperNintend0rk (on 11 May 2022)

So much for the shortage ending in 2022... sorry, I mean 2023... actually, on second thought, make that 202X lol

  • +1
DonFerrari (on 10 May 2022)

Yes we unfortunately know it.

  • 0
The Fury (on 10 May 2022)

While obviously not a short term solution, and I presume most of the technological industries are suffering, not just consoles but should we be recycling more? As in I'm sure loads of people have old computer or phones.

  • 0
thevideogameninja (on 10 May 2022)

I think things have gotten better in terms of the releases of these systems online but its still a far cry from the days of just strolling by your local Wal-mart and picking up a new console off the shelf.

The gamers who have been adamant about purchasing next gen hardware I think have managed to get their hands on what they wanted over these last few years at some point but that's not to say it has been easy by any stretch.

Its too bad these shortages will continue but with certain events going on in the world right now I don't anticipate much change anytime soon.

Speaking of, how many out there have been able to snag their desired next gen hardware?

-NEXT GEN SHORTAGE WOES... NINJA APPROVED-

  • -4

I've been able to get a 3080 and a PS5 for me and my cousin. Rather easily as well. I have the benefit of being in front of a PC almost all 8 hours of work though. So I setup a chrome addin to alert me when the best buy button goes from sold out to buy now and got both devices. Actually one PS5 came from the Sony website register thing they were doing.

  • 0

Awesome!

Yeah, I find that the only way to make sure you get one is to sign up for alerts on various outlets or social media accounts.

I guess it says a lot about the current state of things in the gaming world when you have twitter accounts solely dedicated to sending mass text alerts for hardware drops. 🤣

-THAT'S THE TIMES WE ARE IN NINJA APPROVED-

  • +4
gtotheunit91 method114 (on 10 May 2022)

That's how I finally got my PS5 a month ago! Signed up to purchase directly from Sony. Took 3 weeks but I was stoked when I got the email.

  • +4
Azzanation (on 10 May 2022)

Due to this, this is where digital will take over sooner rather than later.

  • -8
VAMatt Azzanation (on 10 May 2022)

I don't see how the chip shortage plays into the digital/physical media divergence.

In any case, digital has already taken over.

  • +5
Azzanation VAMatt (on 11 May 2022)

If they are unable to keep up with demand, than their software will take a hit aswell. They now need to rely more on digital media to please shareholders and achieve targets.

Once the focus fully shifts to digital, why would they need hardware? Cost more to produce, warranties, materials etc. Thats all cleaned up going digital. More profits, more access to customers, more software sales etc.

  • -3
Pemalite Azzanation (on 11 May 2022)

How are you going to play that Digital software?

We are already in the digital era.

  • +6
Azzanation Pemalite (on 11 May 2022)

Apps

  • -3
Pemalite Azzanation (on 11 May 2022)

And how do you think those apps are going to run without hardware?

  • +5
Azzanation Pemalite (on 11 May 2022)

People have hardware, its called PCs, Mobiles, Tablets, TVs.

  • -3
Pemalite Azzanation (on 13 May 2022)

Mobiles, Tablets and TV's don't have the processing power for high-end AAA games.
And even if you were just streaming, those apps need to be updated, features added and improved, meaning it will necessitate hardware upgrades anyway at some point... Especially as TV's loose update support fairly quickly.

The console market exists because 100's of millions of people prefer gaming on a console rather than a Mobile, PC or Tablet.

  • +1
Azzanation Pemalite (on 13 May 2022)

100s of millions also preferred physical games, now its favoured towards digital.
TVs are already adding streaming tech and Xbox is recently getting GamePass for TVs. All customers need to do it buy the digital game and they will be able to stream it on any device.
With the manufacturing issues, companies will struggle to meet demand where as going full digital, they wont have that issue and infact will open the door to even more customers. Its the future, wont happen over night but that will be the direction.
Like Netflix and Digital movies, physical movies dont drive the industry anymore.

  • 0
Pemalite Azzanation (on 15 May 2022)

Missing the point. Every internet connected device supports "streaming" in one form or another.

Even the Super Nintendo.

The issue stems from support, it's all well and good that a Playstation 4 can stream content... But it lacks functional fixed function pipelines to decode modern, high efficiency formats like h.265... And that certainly impacts streaming options.

TV's are even in a worst position as often they are using garbage ARM SoC's with bare-minimum decode/encode engines, let alone capable CPU cores or a modern software stack... Manufacturers also stop supporting them very quickly.

Then you have the other issue of latency.

Movies and TV shows obviously don't suffer the latency issue as you aren't directly interacting with those medias... It doesn't matter if the latency is 10 seconds as long as your buffer is large enough to compensate... But start talking 1/10th of that latency with video games and things start to fall apart.

Conversely... And this is the big part your are missing is that... Going fully digital with video games actually still requires processing hardware.
You are basically just moving the console from the living room and moving it to a server environment.
The number of high-end GPU's and CPU's doesn't actually change, you are just shifting the processing load to a more central location.
Thus if you wanted to Stream Playstation 5 games, Sony would essentially just house a PS5 in a special enclosure in a server room.

In short... It will do absolutely NOTHING for the chip shortage.

  • 0
Azzanation Pemalite (on 15 May 2022)

As a business standpoint, Hardware is not the way forward. It costs billions to RnD, they lose money on every unit sold, they are struggling to keep up with demand and missing out on potential customers etc.

Hardware comes in many shapes and forms and doesn't need an exclusive box to rely on. Billions of people have phones, PCs and TVs.

All customers need is a gateway to the games. Why would you need an Xbox if GP is built into your TV? Not everyone needs high end fidelity and the latency issues of today, is not much different than running your game in "None Game Mode" on your Smart TV.
Plenty of gamer's will accept it just to play games.

Steam is the biggest online gaming app in the world and it doesn't require exclusive hardware to play 99% of the games in the market. It wont happen over night however with the shortages, its times like these where companies start making bold moves to keep and increase their customer userbase.

  • 0
Pemalite Azzanation (on 15 May 2022)

Hardware is required in either approach.

You still need an Xbox in the server.

Steam doesn't stream games, Steam is just a store front on a Windows PC platform.
You still need hardware.
The difference is, if a games requirements exceeds your hardware capability, you can't run that game.

Doesn't matter if you are streaming a game from the cloud, downloading a game from a server.. Or running the game locally, you still need high-end CPU's, GPU's and oodles of Ram because these things don't compute themselves out of thin air.

Localized processing has advantages of lower latency... But I elaborated that in my prior post which you seem to have skipped over.

  • +3
Azzanation Pemalite (6 days ago)

I understand what you are saying however everything you have just stated is cancelled out because billions of people own PCs which IS the hardware. If you have a PC, you will be able to stream your PC games to any device like your TV or Laptop etc. Thats the direction.

We dont require exclusive hardware anymore, just like we dont need Movie players under our TVs. Everything will run off Apps.

I am not a Streamer, i prefer phyiscal like everyone else however i am just being a realist.

  • 0
Pemalite Azzanation (6 days ago)

Back in the Xbox 360 era I obviously had an extremely high-end PC, I was getting my gameplay footage video'd, transcoded and streamed to the XBox 360.

And it worked. But there was an obvious latency hit as it takes time to convert the footage into video, then transcode on the fly, stream it over my network and the Xbox 360 has to unpack and process it.

I was limited by the Xbox 360 hardware feature set, hence the requirement to transcode the video into a format the Xbox 360 could process efficiently... Of course if I upgraded the console to the Xbox One I would have opened up new doors, but there are still limitations... I.E. No 4k/60 streams.
Even if I upgrade to the Xbox Series X, I still cannot play around with HEVC.

Either way, Streaming games from one device to another still requires hardware for processing, there just isn't a way around that.

Physical or Digital still requires hardware to run the games.

  • +4
VAMatt Pemalite (6 days ago)

While I think he really meant streaming, not digital, I get what Azz is saying - We won't need dedicated gaming devices. So, at the margin, that would reduce chip demand. But, it's really a tiny, marginal reduction.

I'll probably want a better phone, and want to upgrade more often, if it's my primary gaming device. So that's demand for chips right there. Or TVs, which use the absolute cheapest, most bare bones processing equipment they can get away with, will need to have better shit in order to satisfy gamers. So, that's chip demand again.

Ultimately, the shift to digital isn't a difference maker at all, and even streaming likely isn't as a material difference maker in terms of the overall market for chips. Though there is some difference in the type of equipment that will be in demand.

  • 0
Pemalite VAMatt (5 days ago)

You still need hardware in the data center to render those games and stream them to a device, that's the issue.

You don't really reduce the number of chips you need, you simply move them to a different location and change the payment model from an upfront lump sum to a monthly fee.

  • 0
Azzanation Pemalite (5 days ago)

I don't disagree with the limitations you bring up. Native will always be better however the world wide issue these companies have is getting native into peoples homes. Something digital can achieve using universal devices etc.

Hoping these shortages are just temporally and they can manufacture to demand. However sources suggesting that this isn't going away any time soon.

  • 0
Pemalite Azzanation (5 days ago)

2022 will see an alleviation of chip supply constraints, but that won't be resolved until the fabs that were being designed and built in 2019/2020 start to come online entirely or in-part in 2024.

Fab capacity is the biggest limiter right now.

Basically my point is that streaming video games will never be like movies due to the technical demands and differences, there will be a userbase who it appeals to though, no doubt.


We just need to look at Google Stadia which failed straight out of the gate.

  • 0