Samsung Electronics has reportedly secured the production order for Nintendo's next-generation game console, the Switch 2's core chip, marking a significant turning point for its foundry business. Nintendo is adopting Samsung's 8nm process, replacing the long-standing manufacturing partnership with TSMC, which adds considerable strategic significance to Samsung's global semiconductor foundry position.
Gaming console breakthrough
According to South Korean media outlets, including Joongang Economy News and Newsis, the system-on-chip (SoC) used in Switch 2 is designed by Nvidia and produced by Samsung. The most important implication is that Samsung has officially entered the gaming console chip market, which has been dominated by TSMC.
The South Korean industry widely believes this "tripartite cooperation" will be an important opportunity for Samsung Foundry to open up new markets.
Strategic considerations behind the switch
Nintendo chose Samsung over TSMC mainly due to Samsung's stable production and process compatibility. Analysts suggest that Nintendo's decision to switch from TSMC to Samsung involves complex strategic considerations.
The previous Switch chips were exclusively manufactured by TSMC, but the initial production target for Switch 2 exceeds 20 million units, making production stability critical. Additionally, changes in storage architecture and internal design require a different SoC design. Samsung, capable of providing related products like SD cards, demonstrates high integration capability, earning strong recognition.
Samsung's 8nm FinFET process already has experience producing high-performance chips such as Nvidia GPUs. With stable yields and high utilization rates, it supports large-scale mass production demands. Since Samsung also manufactures the SD cards supplied for Switch 2, it can offer system-level optimized solutions, which was reportedly a key factor influencing Nintendo's choice.
Moreover, Samsung employs low-power design technology and firmware optimization to effectively control heat issues, a challenge previously encountered during microSD product development.
First signal in foundry competition
Industry observers view this order not merely as a one-time contract but as the "first signal" of Samsung formally challenging TSMC, the global leader in foundry services.
For a long time, TSMC has practically monopolized major clients such as Apple, AMD, and Qualcomm. Samsung, leveraging partnerships with influential and technically strong companies like Nintendo and Nvidia, is laying the foundation for a counterattack.
Market research and investment institutions have estimated that if Switch 2 sales exceed 20 million units in its first year, Samsung could generate foundry revenue of KRW1.6 trillion (US$1.2 billion).
Samsung Foundry is expected to expand beyond its traditional focus on smartphones and servers into new consumer electronics fields such as game consoles, which will help diversify its client base and broaden its revenue foundation in the long term.
Article edited by Jerry Chen
