Nintendo Shares Slide as Chip Shortage Fears Resurface

Nintendo’s stock has taken a noticeable hit this month, even as the Switch 2 continues to fly off shelves. Despite strong early sales for its new console, investor confidence has wobbled amid renewed concerns about rising chip and memory costs.

Shares in the company slipped as much as 4.7% on Tuesday, extending a steady decline seen throughout December. According to Bloomberg, Nintendo’s market value may have fallen by around £10 billion so far this month. The main driver appears to be anxiety over component pricing rather than demand for the hardware itself.

At the centre of the issue is memory. Bloomberg estimates that the cost of RAM modules used in the Switch 2 jumped by roughly 41% over the last quarter. That’s a significant increase for a mass-market console, where margins are often tight even in the best of times.

The pressure does not stop there. NAND flash storage prices are also creeping up, with an estimated 8% rise after suppliers delayed shipments. SSD maker Transcend recently cited “increased demand from large data centres and hyperscalers” as the reason for the slowdown, naming SanDisk and Samsung among those affected.

For consumers, the impact is already visible. The Switch 2 relies on microSD Express cards for expandable storage, and prices remain stubbornly high. A 1TB card often sells for close to £150, while smaller 256GB options typically land between £45 and £60. Pelham Smithers of Pelham Smithers Associates told Bloomberg that this is “effectively a cost that Nintendo has passed onto the gamer.”

None of this changes the fact that the Switch 2 launch has been strong. With the holiday season approaching, Nintendo recently raised its sales forecast to 19 million units by the end of the financial year, up from 15 million. Demand clearly isn’t the problem.

The concern for investors is what comes next. Consoles are expensive to manufacture, and sustained increases in memory and storage costs could squeeze profits unless Nintendo adjusts pricing, absorbs the hit, or finds savings elsewhere. For now, the market seems uneasy, even as the company’s latest hardware continues to sell at an impressive pace.

Whether these fears ease will likely depend on how long the current chip and memory pressures last — and how Nintendo chooses to respond.