Nintendo set to cut Switch production by 20% due to chip shortages

Nintendo Switch Lite
(Image credit: Nintendo)

Nintendo has confirmed it is cutting its production of Switch consoles by 20% because of the ongoing chip shortage. 

As reported by Nikkei (thanks, Eurogamer), Nintendo has been forced to amend its production schedule over the rest of this fiscal year, committing now to manufacturing 24 million Switch consoles, down from its original target of 30 million.

In a brief statement, Nintendo said it was "assessing the impact" the chip shortages were having on its hardware production, while President Shuntaro Furukawa said the company felt it was unable to meet current demand, which he described as "still strong". 

The production reduction has resulted in a 37% fall in Nintendo Switch sales year-on-year, with September marking the firm's third consecutive month of sales decline. 

Since the hybrid system first launched in 2017, it has sold over 89 million units. While it doesn't yet quite match the 102m Wii units sold, it's thought the Switch is on course to surpass that milestone.

Analysis: what do we mean when we say 'chip shortage'?

As we explained in TechRadar Pro's article, nobody can really say when the chip shortage will end. Using the term "global chip shortage" is an oversimplification, as it doesn't really explain the complexity of the semiconductor supply chain, nor the variance in type of chip we're talking about. As a result, different people mean different things when they refer to the chip shortage – for instance, the shortage is affecting the automotive industry differently from the electronics sector. 

"[The term] 'chips' covers a wide range of different chip types," Alan Priestley, VP Analyst at Gartner, told TechRadar Pro at the time. "While some chips may be available, they often require other chips in order to be usable. For example, CPUs require power management chips, and while CPUs are not in short supply, power management chips are."

That said, current production is essentially maxed out, and with no signs of demand wavering, it looks like the shortages will continue until new fabrication plants are built. And because it takes at least two years to get a plant fully operational, it may take to around 2023 before chip supplies stabilize. 

We're expecting Black Friday 2021 and Cyber Monday to offer various deals on Nintendo Switch games, hardware, and accessories, but the decline in production could mean the console becomes harder to find in the future, demand permitting.