The biggest maker of the chips that go into Switch 2 cartridges is stepping away. In its third-quarter earnings report, Macronix said its ROM chip production “has reached its end” and that it will start “gradually decoupling from the game industry.”
Nintendo has the most to lose here. According to analyst David Gibson, Macronix is Nintendo’s “main memory chip maker” for the physical game cartridges used on both the Switch and Switch 2.
AI demand took the capacity first
PC buyers have already paid for the AI industry’s hunger for memory and storage. For years, that demand has raised prices and tightened supply of RAM, SSDs and GPUs. Game cartridges are now caught in the same squeeze.
Macronix’s own figures are plain. Its ROM output fell 39 percent over the past year, and ROM now makes up only 5 percent of the company’s business. The company said NOR- and NAND-based memory and eMMCs are crowding that work out, since they command higher prices and see stronger demand.
Limited capacity adds to the pressure. Macronix tops out at 25,000 12-inch wafers per month, and the $1.2 billion it plans to spend on new capacity won’t be ready for a year or longer. In the meantime, any wafer used for lower-priced ROM chips is one that could have brought in more money on other products.
Nintendo is keeping cartridges for now
This doesn’t mean Nintendo is following Sony toward dropping physical games. Last month, Nintendo said it had no plans to stop making game cartridges in the near future.
Sticking with physical media may get more expensive, though. Once Macronix pulls back, Nintendo will need to rely on suppliers such as Rohm and Lapis Semiconductor for the rest of its ROM chips, which could raise the cost of producing each cartridge.
Physical games may get pricier
That extra cost could reach buyers. Earlier this year, Nintendo began pricing some physical games above their digital download versions.
Cartridge costs already affect which games ship on a physical cart. Last year, Japanese publisher Inin agreed to a full Switch cartridge release of R-Type Dimensions III only after it said “two new smaller cartridge [storage capacity] sizes for Nintendo Switch 2” lowered the cost of producing those carts.
Digital sales could offset some of this. Gibson said digital software made up 61.5 percent of Nintendo’s business in the second calendar quarter of 2026, a small rise from a year earlier. If that share keeps growing, falling demand for ROM-based cartridges could in time balance out the higher cost of making them.