Key takeaways
- Macronix says ROM was 5% of its revenue last quarter, down from 26% a year earlier, and it will develop no new ROM products.
- The company is capped at 25,000 12-inch wafers a month, so every wafer spent on low-margin ROM is one not spent on higher-priced flash.
- TechSpot reports Macronix's gross margin hit 70.5% last quarter versus 13.5% a year earlier, as AI data centers drove demand for NOR flash.
- Nintendo also buys ROM from Rohm group companies, and whether Switch 2 cartridges are affected at all is disputed between outlets.
Macronix, a main maker of the ROM chips inside Nintendo Switch game cartridges, is winding down that business so its factories can build flash memory for AI data centers. Analyst David Gibson of MST Financial flagged it on X on November 4, 2026, after reading the company’s quarterly report. ROM made up just 5% of Macronix revenue last quarter, down from 26% a year earlier.
The decision comes down to arithmetic. A chip factory has a fixed number of slots, and AI buyers will pay far more for what else those slots can make.
Why would Macronix walk away from Nintendo?
Because ROM earns less per wafer than the alternatives. Ars Technica and TechSpot both report that ROM is being crowded out by NOR flash, NAND flash and eMMC, which are more profitable. With limited capacity, low-margin ROM chips take up wafer space that other chips could use to bring in more revenue.
Macronix will develop no new ROM products, according to the reports. Q3 was the final quarter in which the company will break out ROM sales on their own line.
The wafer math, in plain English
A wafer is the round slice of silicon that chips are printed on. Ars Technica reports that Macronix can only turn out 25,000 12-inch wafers a month, and that added capacity is a year or more away.
That window is what forces the choice. Output can’t grow quickly, so each wafer is either a batch of ROM for game cartridges or a batch of flash for servers. If the server chips sell for much more, the cartridge chips lose. Macronix didn’t wait for a better offer from the game industry.
What AI did to NOR flash prices
Data center customers are pulling hard on NOR flash. Macronix chairman Miin Wu, according to TechSpot, said those customers are “chasing us for more capacity.” (Engadget calls Wu the CEO; outlets differ on his title.)
TechSpot also cites TrendForce’s estimate that an AI server needs three to five times as much NOR flash as a regular server. Over the first six months of 2026, NOR contract prices about doubled.
Those prices show up in Macronix’s results. TechSpot reports a gross margin of 70.5% last quarter against 13.5% a year earlier, and a net profit of NT$10.95 billion. Those are company-wide figures. No report breaks out the margin on ROM alone.
ROM’s shrinking slice
Engadget and Ars Technica put the decline in Macronix’s ROM business at 39% over the past year. Set that beside the drop from 26% of revenue to 5% and the rest of the company must have grown several times over. By my rough math from those rounded figures, total revenue more than tripled. That’s my arithmetic, not a reported number.
TechSpot says NAND and NOR flash now account for almost all of the company’s revenue, in near-equal shares. Ars Technica, relaying a Taiwanese outlet called BigGo Finance, says the earnings report described ROM as having run its course and said the company will gradually decouple from the game industry. That wording is secondhand, so treat it as a paraphrase of a paraphrase.
Where the money is going instead
Macronix has earmarked about $1.2 billion (NT$37.8 billion) for new investment. According to TechSpot and Tom’s Hardware, NT$22 billion goes to expanding manufacturing capacity and NT$15.8 billion to NAND flash used in eMMC and 3D NAND. None of it is for ROM.
It’s a pattern across memory. TechSpot notes that Micron shut down its Crucial consumer brand late last year to free supply for AI customers. Whether other memory makers will also drop low-margin legacy products is an open question.
Who else sits in Nintendo’s chip chain?
Nintendo doesn’t buy ROM from Macronix directly, according to Tom’s Hardware. A fabless company called MegaChips designs the chips to Nintendo’s needs and outsources manufacturing to Macronix. MegaChips’ 2022 report put Nintendo at 87.8% of its sales and Macronix at 67.8% of its outsourced manufacturing purchases. Those figures are four years old and may have changed.
Macronix isn’t Nintendo’s only supplier. Reports say Nintendo also buys ROM from two Rohm units, ROHM Semiconductor and LAPIS Semiconductor. Tom’s Hardware says it doesn’t know what MegaChips’ contingency plan is. For a deeper look at the chip-to-cartridge path, see our Macronix ROM exit explainer.
What it means if you buy Switch games
Nothing in the reporting says cartridges disappear tomorrow. TechSpot’s own assessment is that Nintendo likely won’t run short soon. A Nintendo executive said last month, per TechSpot, that the company isn’t planning to drop physical releases for the Switch 2.
Gibson expects the change to push more games toward digital sales or Game-Key Cards, which contain only a license to download the game. He also thinks “physical cards will likely carry on for some time.” That’s an analyst’s opinion. Tom’s Hardware’s talk of higher cartridge prices is its own speculation too.
One piece is disputed. Gibson’s thread says Macronix makes the ROM in both Switch and Switch 2 cards. Engadget says Switch 2 cartridges use NAND flash, which Macronix isn’t phasing out, and Nintendo Life edited Switch 2 out of its headline over conflicting reports. If you own a Nintendo Switch 2 or an original Nintendo Switch, I’d wait for Nintendo to say something before changing how you buy.
The memory squeeze is already hitting hardware prices. TechSpot reports Nintendo made the Switch 2 more expensive in Japan, the US and Canada after memory costs climbed, and that Switch 2 sales last quarter came to 2.67 million units, down 41% from a year before. The link to memory costs is TechSpot’s framing. Digital already accounts for roughly 60% of Nintendo software sales per TechSpot, or 61.5% per Engadget.
What nobody has answered yet
Nintendo hasn’t been reported as commenting on supply, pricing or backup plans. Nobody has said when Macronix’s final ROM shipments will go out, or whether MegaChips can find another manufacturer and how fast. It’s also unclear whether the Rohm companies can absorb the lost volume.
Then there’s the Switch 2 question. Until Nintendo or Macronix spells out which cartridge chips go where, the outlets will keep disagreeing.
Tools & products mentioned
- Nintendo Switch 2 on Amazon — Check current price
- Nintendo Switch on Amazon — Check current price
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Frequently asked questions
Why is Macronix stopping ROM chip production?
Reports say ROM earns less per wafer than NOR flash, NAND flash and eMMC, and Macronix's capacity is limited. It's moving that capacity toward flash that AI data centers want. ROM fell to 5% of its revenue last quarter from 26% a year earlier.
Will Switch 2 cartridges be affected?
It's disputed. Analyst David Gibson says Macronix ROM chips are in both Switch and Switch 2 cards, while Engadget says Switch 2 cartridges use NAND flash, which Macronix isn't phasing out. Nintendo hasn't been reported as commenting.
Who else makes ROM chips for Nintendo?
Reports say Nintendo also buys ROM from Rohm's ROHM Semiconductor and LAPIS Semiconductor units. MegaChips designs chips for Nintendo and outsources manufacturing to Macronix.
Is Nintendo going digital-only?
Not according to the reports. TechSpot says a Nintendo executive stated last month that the company isn't planning to drop physical releases for Switch 2. Analyst Gibson expects more digital sales and Game-Key Cards, but that's his opinion.
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Sources
This article was compiled from reporting by the following outlets. Links go to the original reports.
- TechSpot: AI memory boom claims another victim as major Nintendo Switch cartridge chip supplier exits ROM business
- Tom's Hardware: Nintendo ROM chip supplier Macronix quits to focus on chips for AI data centers, reports indicate
- Neowin: Key Nintendo Switch cartridge chip maker is phasing out production
- Engadget: Nintendo's main Switch cartridge supplier is leaving the ROM business
- Ars Technica: Nintendo's biggest ROM chip supplier is bowing out of the business
- Ars Technica: Nintendo’s biggest ROM chip supplier is bowing out of the business
