"Three-Way Alliance with Nintendo and Nvidia"... Samsung Foundry Finds a Breakthrough

Switch 2 SoC Chip Delivers 10x Performance
Changes in Storage Device Placement
SD Card Now Used for External Storage
Designed by Nvidia in the US
Manufactured by Samsung Instead of TSMC
Recognized Progress in Technology and Trust

The upcoming release of Nintendo's new gaming console, the Switch 2, scheduled for June 6, is expected to mark a significant turning point for Samsung Electronics' semiconductor business. Nintendo has decided to entrust the production of the Switch 2's core chip to Samsung, rather than its previous supplier, Taiwan's TSMC. Samsung has long struggled to catch up with TSMC, the leader in the foundry business, which manufactures semiconductors on behalf of other companies. However, by being selected for the first time to produce the key component for a Nintendo console, Samsung is now seen as having made meaningful progress.

The key component inside the Switch 2 is the System on Chip (SoC). This chip integrates the computer's core functions?including the central processing unit (which acts as the brain), the graphics processing unit (which renders images), and memory control?into a single chip. It is designed to deliver high performance within compact devices such as smartphones and gaming consoles.

For the Switch 2, the SoC chip has been designed by Nvidia in the United States, manufactured by Samsung Electronics, and supplied to Nintendo. The collaboration among these three companies for the Switch 2 marks the first outcome of their partnership.

Nvidia has stated that the SoC chip used in the Switch 2 delivers more than ten times the performance of its predecessor. Previously, TSMC was responsible for manufacturing the Switch's SoC chip. There are technical reasons behind Nintendo's decision to switch partners to Samsung. The internal design of the Switch 2, including the location of its storage device, has been changed from the previous model. For example, the SD card is now used as an external storage device. As a result, the SoC chip also needed to be manufactured differently to ensure smooth operation with other components. After reviewing potential suppliers, Nintendo appears to have determined that Samsung would be a more advantageous choice than TSMC. Since Samsung also manufactures and supplies SD cards tailored for the Switch 2, it has the advantage of being able to produce SoC chips optimized for the device.

This contract could have a positive impact on Samsung's entire foundry business. Until now, TSMC has dominated the market for high-performance chips used in mobile devices. Samsung has faced difficulties in securing customers. In this context, the decision of a global consumer brand like Nintendo to choose Samsung is considered a meaningful step forward in terms of both technological capability and trust. An industry insider commented, "This is a significant development, given the large gap in market share and the considerable challenges in acquiring customers."

The Switch 2 has been generating anticipation even before its release. An American investment firm has analyzed that Nintendo is targeting sales of up to 20 million units in its first year, and has already secured its production and supply chain. If the Switch 2 succeeds, it is projected that Samsung could generate foundry revenue of approximately 1.6 trillion won from this product alone. Even as demand for console gaming devices has declined compared to the past, if the Switch 2 manages a rebound, it could invigorate Samsung's overall semiconductor business. There are also expectations that if Samsung Foundry succeeds in proving its technological prowess and production stability, it could partially disrupt the market landscape, which has been centered around TSMC.