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[Fisty]

I would assume there's more competition from Chinese smartphones than Apple, Switch and iPhones probably don't share many similar components (like the screens mentioned in OP)

 

[Terrell]

From my perspective, Nintendo has a potential point of leverage here. They could negotiate terms with Apple to leverage Apple's NAND contracts and better volume pricing to serve Nintendo's needs as well as their own, by ceding a higher percentage of their app earnings to Apple (it's a longshot, but based on the circumstances, a longshot might be required to keep production going at a reasonable cost)

It'd still be a sacrifice to Nintendo's bottom line, but it might not hurt as bad as not having NAND chips to continue manufacturing the Switch or the higher price tag they'll have to pay for them.

 

[Godzilla's Left Toe]

Time to pull a Sony. Nintendo announces the Switch TV.

They really should.

 

[Savitar]

Apple had it's time.

Time to free it's cult members.

 

[Eusis]

Some have told us mobile market was going to hurt console games market, but we didn't listen.

To be fair those that listened looked mainly at the mainstream customers. We never thought to look at the manufacturers.

 

[ultrazilla]

From my perspective, Nintendo has a potential point of leverage here. They could negotiate terms with Apple to leverage Apple's NAND contracts and better volume pricing to serve Nintendo's needs as well as their own, by ceding a higher percentage of their app earnings to Apple (it's a longshot, but based on the circumstances, a longshot might be required to keep production going at a reasonable cost)

It'd still be a sacrifice to Nintendo's bottom line, but it might not hurt as bad as not having NAND chips to continue manufacturing the Switch or the higher price tag they'll have to pay for them.

Yes, this would be a very good idea to look at. Both would benefit. With them announcing a new mobile Zelda game.....Nintendo has some leverage.

 

[Cerium]

Nintendo has no leverage on fucking Apple lol, Apple crushes governments beneath its heel.

 

[Green Ninja]

Nintendo has no leverage on fucking Apple lol, Apple crushes governments beneath its heel.

Nintendo fought and beat Universal Studios when they were in their prime and defeated Microsoft and Sony when console gaming was at its zenith. So this sort of David vs. Goliath battle is nothing new for them.

 

[antonz]

So basically what we can get from this is they hope they can sort shit out and produce up to 20 million units. In the end however it probably will be less depending on how they can get adjustments in supply line.

 

[Doctre81]

This makes me worried that the quality of parts may differ across different switches...

 

[samar11]

Nintendo fought and beat Universal Studios when they were in their prime and defeated Microsoft and Sony when console gaming was at its zenith. So this sort of David vs. Goliath battle is nothing new for them.

In this particular case it is something new for them. Iphones

 

[cireza]

This looks like it could actually be a real problem.

 

[ggx2ac]

This makes me worried that the quality of parts may differ across different switches...

The only real concern is the NAND flash memory, it just means Nintendo will have to procure NAND flash memory from multiple manufacturers as opposed to just using Toshiba.

It would give them a better chance than to wait for their turn since they may not choose to pay a higher price to outbid rivals.

I doubt it's going to be like the New 3DS lottery with the LCD screens that are IPS or TFT which was also most likely a case of trying to procure screens from multiple manufacturers to meet demand as fast as possible.

This means they've gone through this before.

Also, I doubt they'll have trouble with the LCD screens with Japan Display Inc being the sole supplier since they just lost Apple as their biggest client. That means there's less of a difficulty for Nintendo to procure LCD screens from JDI.

 

[Calm Mind]

Samsung to the rescue!

 

[TunaLover]

I just hope Switch hardware doesn't take a hit in quality because a possible different part provider.

 

[ggx2ac]

Here's what I was looking for:

Great to see, although as other have already said the link to the actual teardown on iFixit should be in the OP:

https://www.ifixit.com/Teardown/Nintendo+Switch+Teardown/78263

They've got great high-quality photos and a breakdown of (almost) all the components in there.

I think it's worth going over some of the more important chips in Switch:

• -snip-
• Flash Memory - Toshiba THGBMHG8C2LBAIL - 32GB eMMC
  We've also seen an equivalent Samsung part in another teardown, although it isn't at all unusual for companies to dual-source things like eMMC. Technically it's stated as being capable of 400MB/s, but that's the interface speed, not the actual memory speed. Expect real-world speeds to be somewhat lower. This is on its own break-out board, so it would be interesting to see if anyone manages to get a higher capacity replacement board to work (eMMC is available at up to 128GB capacities at the moment).
  
  -snip-

The bolded about the eMMC shows that Nintendo are already sourcing from both Toshiba and Samsung already for eMMC since launch.

Since that's the case, we don't know yet if they'd need to source from more manufacturers, there are these Chinese manufacturers for example:

NAND flash memory was already headed toward a shortage, since it is used to increase memory capacity as smartphone functionality expands. Now, Samsung's rivals are seizing the offensive, taking the South Korean company's woes as an opportunity to expand market share. In particular, the Chinese manufacturers behind the Oppo and Vivo brands are competing to secure NAND flash memory.

http://asia.nikkei.com/Markets/Commodities/NAND-flash-memory-prices-at-2-year-high

 

[Skittzo0413]

^ And I would imagine the quality of the NAND flash memory would not differ too much from different suppliers, and even if it does it's not a very noticeable problem if they wind up with a few lower quality modules. You'd get slightly longer loading times I guess.

The article also talks about the LCD panels and linear actuators being supply constrained. I know absolutely nothing about the manufacturers of the linear actuators but we did hear Japan Display was running into financial trouble not long ago so that may be a bit of an issue. I wonder if they would try to source LCDs from somewhere else, hopefully with no change in quality.

 

[tebunker]

Not sure if this was mentioned, but every tome someone called Nintendo stupid for discontinuing the NES Classic this is the exact king of situation I would try to reference.


Not saying the Classic used the same parts. However the clasic still needed capital/money invested in to parts inventory to make them. Thats capital/money not being invested in switch production.

Its clear that if Nintendo is trying to hit 20 million units by the end of March then it has to be an all hands on deck type situation where they have to dedicate all the resources they have available from anything not considered long term or permanent.

I wonder what kind of contracts and procurement they had left on the new 2ds/new 3ds. It really screams a swansong product utilizing any remaining parts and fulfilling contracts/orders. I can't forsee them keeping that product around past the end of the year. So if you're a collector get your new 2ds this year and watch it quickly go the way of the gba micro.

I can barey imagine having to negotiate against Apple for parts. Seems insane.

 

[ggx2ac]

^ And I would imagine the quality of the NAND flash memory would not differ too much from different suppliers, and even if it does it's not a very noticeable problem if they wind up with a few lower quality modules. You'd get slightly longer loading times I guess.

The article also talks about the LCD panels and linear actuators being supply constrained. I know absolutely nothing about the manufacturers of the linear actuators but we did hear Japan Display was running into financial trouble not long ago so that may be a bit of an issue. I wonder if they would try to source LCDs from somewhere else, hopefully with no change in quality.

I really doubt the other two are problems. Japan Display Inc lost Apple as its biggest client and are going to lose Chinese smartphone makers as well because of them wanting to imitate the next Apple iPhone by going after OLED screens. They are trying to go after LCD screens for cars to make up for the loss which will not be a big earner for them. That means less clients taking up time on manufacturing LCD screens at Japan Display Inc.

As for the Linear Resonant Actuators, I doubt that will be a problem as well. If we ignore the possibility that it is the Haptic Reactor from Alps Electric which is specifically for video game applications, then all that leaves is that it is a regular LRA used in Smartphones, but I still don't think it is a regular LRA. Either way, the LRA availability is pretty much the same thing as the availability of manufacturing LCD screens, database servers don't use either of these things but they use up NAND flash memory.

It's the combination of smartphones and database servers that use NAND flash memory that are more of a problem for scarcity than it is for LCD screens and LRAs. I even tried searching for Linear Resonant Actuator shortages and there doesn't seem to be such a thing from​ any media site reporting on it.

 

[andthebeatgoeson]

The second part seems to be saying that most people on the Switch don't need more than 32 GB though I suppose he could be talking about phones, the post isn't 100% clear.

I do stand by my statements...

It was a comment on how Nintendo isn't competing for parts. I have a phone i bought, last year, that is supposed to be the Android flag ship, with 32 GB of memory. Someone mentioned that no phones are using that size. And if I wasn't burning thru memory with large pictures and videos, i would still have 10 GBs of free space.

And based on the cost commitment, I'm sure a lot of people are using 32 gb models.

The poster was mentioning how a lot of people are buying phones with 32 GB and don't need much more than that.

 

[Skittzo0413]

I really doubt the other two are problems. Japan Display Inc lost Apple as its biggest client and are going to lose Chinese smartphone makers as well because of them wanting to imitate the next Apple iPhone by going after OLED screens. They are trying to go after LCD screens for cars to make up for the loss which will not be a big earner for them. That means less clients taking up time on manufacturing LCD screens at Japan Display Inc.

As for the Linear Resonant Actuators, I doubt that will be a problem as well. If we ignore the possibility that it is the Haptic Reactor from Alps Electric which is specifically for video game applications, then all that leaves is that it is a regular LRA used in Smartphones, but I still don't think it is a regular LRA. Either way, the LRA availability is pretty much the same thing as the availability of manufacturing LCD screens, database servers don't use either of these things but they use up NAND flash memory.

It's the combination of smartphones and database servers that use NAND flash memory that are more of a problem for scarcity than it is for LCD screens and LRAs. I even tried searching for Linear Resonant Actuator shortages and there doesn't seem to be such a thing from​ any media site reporting on it.

Japan Display losing clients could be cause for concern from a financial capacity standpoint. If they have to shut down some production lines or fire some employees that still has a big effect on what and how quickly than can produce. But yeah it doesn't look like there will be the stated competition with Apple for screens that the article seems to be claiming.

Hopefully it is just the NAND flash memory and Samsung will pick up the slack to make up for Toshiba's constraints. Or they'll go to a third supplier. Flash memory seems to be one of the easier things to source from multiple suppliers since there shouldn't be too big of a quality differential.

Hopefully it all gets sorted soon, they need to increase shipments for July especially.

 

[PSFan]

Nintendo fought and beat Universal Studios when they were in their prime and defeated Microsoft and Sony when console gaming was at its zenith. So this sort of David vs. Goliath battle is nothing new for them.

Yeah okay. They also fought and lost to Galoob over the Game Genie in that same era. And that time, they were Goliath and got beat badly.

 

[JonnyDBrit]

Yeah okay. They also fought and lost to Galoob over the Game Genie in that same era. And that time, they were Goliath and got beat badly.

Also in the Universal scenario they merely had to prove they had the right to use a concept, not try and successfully negotiate as a customer with a supplier. Kinda different situations.

 

[Thraktor]

From my perspective, Nintendo has a potential point of leverage here. They could negotiate terms with Apple to leverage Apple's NAND contracts and better volume pricing to serve Nintendo's needs as well as their own, by ceding a higher percentage of their app earnings to Apple (it's a longshot, but based on the circumstances, a longshot might be required to keep production going at a reasonable cost)

It'd still be a sacrifice to Nintendo's bottom line, but it might not hurt as bad as not having NAND chips to continue manufacturing the Switch or the higher price tag they'll have to pay for them.

It's worth noting that Apple and Nintendo don't use the same flash memory components, although they do compete indirectly for the overall NAND production. Nintendo is using eMMC in Switch, which combines NAND dies with a memory controller in a single package. This is the most popular flash memory type in mobile at the moment, with UFS being a faster equivalent used in higher-end phones. Apple, uniquely among phone manufacturers, just uses raw NAND chips, as they have their own memory controller embedded on their A-series SoCs.

From a production perspective they are competing, as it's the same NAND dies which are ending up either in raw NAND packages or in eMMC (or UFS) packages with controllers, but they're not actually purchasing the same end products.

I really doubt the other two are problems. Japan Display Inc lost Apple as its biggest client and are going to lose Chinese smartphone makers as well because of them wanting to imitate the next Apple iPhone by going after OLED screens. They are trying to go after LCD screens for cars to make up for the loss which will not be a big earner for them. That means less clients taking up time on manufacturing LCD screens at Japan Display Inc.

Even if Apple do move to OLED with the next iPhone, they'll continue making the 7 and SE for a while, and will likely continue using JDI screens for iPads (and possibly MacBooks?) for the foreseeable future, so Apple will continue to be their biggest client for some time yet.

 

[badcrumble]

From my perspective, Nintendo has a potential point of leverage here. They could negotiate terms with Apple to leverage Apple's NAND contracts and better volume pricing to serve Nintendo's needs as well as their own, by ceding a higher percentage of their app earnings to Apple (it's a longshot, but based on the circumstances, a longshot might be required to keep production going at a reasonable cost)

It'd still be a sacrifice to Nintendo's bottom line, but it might not hurt as bad as not having NAND chips to continue manufacturing the Switch or the higher price tag they'll have to pay for them.

Apple's bread and butter is their hardware margins and Nintendo's bread and butter is their software margins. Why on earth would either of them sacrifice those?

Not to mention the numerous most-favored-nation clauses such a thing would inevitably trigger.

 

[Terrell]

Apple's bread and butter is their hardware margins and Nintendo's bread and butter is their software margins. Why on earth would either of them sacrifice those?

Not to mention the numerous most-favored-nation clauses such a thing would inevitably trigger.

Nintendo's mobile earnings have already been stated by Nintendo to be revenue that they would use to fund ventures into their other business segments. Like, for example, making sure they can afford to produce Switches.

And I doubt that Apple would really want the bad press of them squeezing out a high-profile electronics company in an industry that they don't even compete in, especially after they made a big show of courting the company they're squeezing out as a high-profile addition to their App Store.
It's a really ugly look for them and the press is already running with it on this scant report from the WSJ. And while Apple playing hardball against its direct competitors is nothing new and is often excused because of their market-leading position, bullying every other industry, especially its big-name software partners, is something you hear very little of, and it won't sit well with electronics makers, the press or some consumers. Apple's corporate image is very important to them, so if there's an easy solution that will ensure that they reduce the losses incurred to keep it (and Nintendo) quiet, they're likely to take it.

Also, I imagine Apple holds most of those "most-favoured-nation" clauses with hardware vendors, at this point, so I don't see an issue with how Apple wants to use its production capacity or who benefits from it.

 

[jroc74]

Nintendo's mobile earnings have already been stated by Nintendo to be revenue that they would use to fund ventures into their other business segments. Like, for example, making sure they can afford to produce Switches.

And I doubt that Apple would really want the bad press of them squeezing out a high-profile electronics company in an industry that they don't even compete in, especially after they made a big show of courting the company they're squeezing out as a high-profile addition to their App Store.
It's a really ugly look for them and the press is already running with it on this scant report from the WSJ. And while Apple playing hardball against its direct competitors is nothing new and is often excused because of their market-leading position, bullying every other industry, especially its big-name software partners, is something you hear very little of, and it won't sit well with electronics makers, the press or some consumers. Apple's corporate image is very important to them, so if there's an easy solution that will ensure that they reduce the losses incurred to keep it (and Nintendo) quiet, they're likely to take it.

Also, I imagine Apple holds most of those "most-favoured-nation" clauses with hardware vendors, at this point, so I don't see an issue with how Apple wants to use its production capacity or who benefits from it.

This is the same company that fought and is probably still fighting Samsung tooth n nail over copying icons and corners. In the midst of that still dealt with Samsung for parts for their iDevices. Even tho they didnt have to.

I honestly believe Apple could care less about how they look to Nintendo or anyone else.

 

[SapphiCine]

Goddamn it. I expect the QC for the Switch screen to be as bad as the 3DS by the time I can get one.

 

[Terrell]

This is the same company that fought and is probably still fighting Samsung tooth n nail over copying icons and corners. In the midst of that still dealt with Samsung for parts for their iDevices. Even they didnt have to.

I honestly believe Apple could care less about how they look to Nintendo or anyone else.

I think you missed the part where I stated that Apple is given a lot of leeway for bad (mostly litigious) behaviour against rivals that they compete with in the smartphone market. Being the front-runner for the modern smartphone and first to market with it gives them a lot of sympathetic people in the press (and in the tech sector itself, since no one wants to be the pot calling the kettle black).

This is not one of those circumstances and that sympathy won't extend outside the smartphone market that Apple is the cornerstone of.

The FBI encryption case is a good example of bad press that Apple wouldn't be able to dodge by being Apple, as it became an issue that divided the country and could have hurt Apple's bottom line, but Apple was able to take a moral high ground on that topic and it was resolved behind closed doors before things turned exceptionally ugly, undoubtedly much to Apple's delight. This issue wouldn't give Apple a moral leg to stand on.

 

[OmegaFax]

Apple has the raw cash to throw down in advance to guarantee supply for their products and leverage contingencies in the event of a shortage. They're supply chain gurus.

There are a ton of companies competing for parts. LCD or NAND chips could go in cars, medical devices, cash registers and other retail contraptions.

 

[StereoVsn]

NAND shortage has been going on since last Fall. Since then server orders from most server vendors have had lead times of 50-60 days if ordered with SSD drives. It's been a huge pain. Cloud hosting vendors (Amazon, Microsoft, Google, etc) have been buying drives by container load.

Basically anything requiring modern NAND is having issues now. Apple and Samsung are somewhat of an exception due to huge quantity deals from the first and second being one of the few large NAND manufacturers.

 

[Red Devil]

Some have told us mobile market was going to hurt console games market, but we didn't listen.

But not because of a shortage of parts, at least I don't recall that being the case.

 

[Shadax the wizard]

Apple had it's time.

Time to recruit it's cult members.

Fixed yer typo there mate 😘

 

[klier]

Nintendo has no leverage on fucking Apple lol, Apple crushes governments beneath its heel.

If you mean some corrupt third world country government, then sure.

 

[badcrumble]

I think you missed the part where I stated that Apple is given a lot of leeway for bad (mostly litigious) behaviour against rivals that they compete with in the smartphone market. Being the front-runner for the modern smartphone and first to market with it gives them a lot of sympathetic people in the press (and in the tech sector itself, since no one wants to be the pot calling the kettle black).

This is not one of those circumstances and that sympathy won't extend outside the smartphone market that Apple is the cornerstone of.

The FBI encryption case is a good example of bad press that Apple wouldn't be able to dodge by being Apple, as it became an issue that divided the country and could have hurt Apple's bottom line, but Apple was able to take a moral high ground on that topic and it was resolved behind closed doors before things turned exceptionally ugly, undoubtedly much to Apple's delight. This issue wouldn't give Apple a moral leg to stand on.

people give a shit about terrorism in a way that they don't about Nintendo

 

[ggx2ac]

More info about Toshiba and NAND shortages:

The planned sale of Toshiba 's flash memory chip business is prompting related companies and trading houses to rethink their procurement strategies.

Uncertainty over supplies of the chips used in peripheral devices is casting a shadow the earnings forecasts of manufacturers. Trading houses, meanwhile, are hoping Toshiba's competitors step up production.

A person involved in the sale of flash memory chips at one trading house predicts a severe shortage of chips if production stalls when Toshiba disposes of its business. Chips from foreign manufacturers have been in high demand since word came out regarding Toshiba's impending sale.

Memory chips are being snapped up, just in case. Rumors are swirling about potential buyers since Toshiba announced in February plans to sell its memory chip operations.

Although the business is profitable, market watchers are skeptical about its future.
With Toshiba planning to spend more than 300 billion yen ($2.68 billion) on its NAND flash memory operations this fiscal year, there are no immediate worries about a lack of production capacity. Liu Ko Chen, chairman and CEO of Taiwanese computer maker Advantech , said he is not too concerned because chip plants are still operating.

But some in the industry are nervous. Strong demand for memory chips used in data centers in North America, and for smartphone chips, has created an unprecedented shortage. Concerns over supplies have pushed large-lot prices for the benchmark 64 gigabit multilevel-cell NAND flash memory chips to around $3.80, up 70% on the year.

A sales representative with another trading house hopes sales of U.S. chips will rise, given the uncertainty over Toshiba's ability to supply products in the coming years. Memory chips used in industrial equipment soon become obsolete, necessitating long-term production capacity and maintenance services.

http://asia.nikkei.com/Business/Com...-chip-unit-sale-worries-manufacturers-traders

 

[ZOONAMI]

Should have gone with 128gb anyway.