Nintendo Co has added Sharp Corp as an assembler of its Switch console, people directly involved in the matter have said, as it works to stabilize production and hedge against US-China trade tensions.
The video game giant has struggled to produce enough units for most of this year as the hit game Animal Crossing: New Horizons and stuck-at-home consumers fueled demand.
While the COVID-19 pandemic hurt production early on, Nintendo president Shuntaro Furukawa this month said that output has returned to normal and that the Switch console is being made in Malaysia, in addition to existing locations in China and Vietnam.
Photo: AFP
The Malaysian factory is owned by Sharp, said the people, who asked not to be identified.
Nintendo’s main assembly partner, Hon Hai Precision Industry Co (鴻海精密) — known as Foxconn Technology Group (富士康科技集團) internationally — owns a stake in Sharp and helped connect the two Japanese companies, they added.
Nintendo asked Hon Hai during the presidency of US President Donald Trump to provide alternative manufacturing sites outside of China to hedge against the trade dispute, one of the people said, and the company ended up directing some Switch orders to Sharp, as the Japanese company had extra capacity in Malaysia.
The production volume at the Malaysian site is limited, the person said.
Those assembly lines are not yet running at full capacity, Furukawa said, but the first batch off the lines is soon to hit store shelves.
A Sharp representative declined to comment, while a Nintendo spokesman declined to confirm any details beyond the president’s earlier public comments.
Switch assemblers plan to operate at maximum capacity through the end of this year, eschewing the typical lull next month that follows the fulfillment of holiday demand.
This suggests that Nintendo, in the current quarter, might end up shipping more than the 10.8 million Switch units it managed in the October-to-December period last year.
Osaka, Japan-based Sharp has a history of working with Nintendo, having once assembled the Famicom console and later provided key components for the 3DS handheld device.
The bulk of Switch production continues to be handled by Hon Hai in China.
Switch sales momentum last month stayed strong, the Nintendo president said, and the hotly anticipated debuts of new consoles from Sony Corp and Microsoft Corp this month were marred by severely limited launch-day supplies.
Released in 2017, the Switch had sold 68.3 million units as of Sept. 30, and its lifetime sales are on track to exceed 100 million units.
The company has expressed confidence in the beefed-up games lineup it has in store for next year.
Bloomberg News has also reported that Nintendo plans an upgraded hardware revision, likely with 4K graphics support, to help extend the life cycle of the console.
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