Macronix, a major ROM chip manufacturer for Nintendo Switch cartridges, plans to exit ROM production entirely and shift focus to more profitable flash and memory chips. The company revealed in its latest earnings call that ROM chips now account for only 5% of its business, down from 26% a year ago.
Nintendo relies on a small number of specialized silicon suppliers, including MegaChips and ROHM, to manufacture ROM chips for its proprietary game cards. Losing Macronix could pressure Nintendo and publishers to either increase cartridge prices or shift more games to Game-Key Cards, which function as digital authentication keys requiring games to be downloaded to the Switch 2's internal storage instead.
The shift reflects broader market trends. AI companies have driven up memory and storage prices over the past two years, pulling suppliers away from consumer-facing products. Some tech companies have pivoted entirely to selling exclusively to AI firms, which demand massive quantities of memory.
Nintendo stated it does not plan to abandon physical games and prefers to offer consumers an "agnostic" platform to play games on.