Macronix to exit ROM chip business, squeezing Switch cartridges

The move is the latest example of the AI-driven memory squeeze reshaping the chip industry. Macronix is redirecting its manufacturing capacity and capital expenditure towards NOR and NAND flash for data centres, following a similar path to Micron, which shut down its consumer Crucial brand nearly a year ago to focus on AI demand.

For Nintendo, the immediate impact is limited but real. Rohm group companies still supply ROM chips, so physical cards are likely to continue for some time, as analyst David Gibson of MST Financial noted. But with one fewer supplier, cartridge costs could rise, and Gibson expects digital margins to grow through more Game-Key Cards, which hold a download code rather than the game itself, or digital-only releases. Nintendo said just last month that it has no plans to abandon physical games, and physical titles still made up 38.5 percent of its software sales as of August, well above rivals.

There is also a wrinkle in how hard each console is hit: Switch 2 cartridges use NAND flash memory, a segment Macronix is not phasing out, so the change bears more directly on original Switch cards. Meanwhile, chip designer MegaChips, which outsources its ROM manufacturing to Macronix and counted Nintendo for 87.8 percent of its sales in 2022, faces the sharpest exposure, with no contingency plan publicly known.