Nintendo Co. has added Sharp Corporation as the assembler of Switch console as the company works to stabilize production and hedge against U.S.-China trade tensions, according to Bloomberg. The company has been diversifying its supply chain since before the outbreak of COVID-19, and the addition of Sharp’s Malaysia factory is part of the effort to raise output.
- The addition of Sharp will see Switch now made in Malaysia, in addition to the existing China and Vietnam locations.
- Nintendo has struggled this year to produce enough Switch console units as stuck-at-home consumers fueled demand while the coronavirus hurt production.
- Nintendo’s main assembly partner, Foxconn Technology co. owns a Sharp stake and helped to connect the two companies.
- Sharp, which operates separately from its Taiwanese owner, will have its stock added to the Nikkei 225 Stock Average next week, after a four-year absence.
- In the current quarter, Nintendo could ship more than the 10.8 million Switch units it did in the October-December period last year due to upcoming holiday demand.
- Nintendo expects to increase its fiscal-year sales target from the current 24 million when it reports the next quarterly results, with analysts forecasting 26.4 million of total sales for the period ending March 31.
- Since its release in 2019, Switch has sold 68.3 million units as of September 30 and is on track to exceed 100 million units.
- Nintendo has expressed confidence in the beefed-up games lineup in store for 2021 and plans an upgraded hardware revision with 4K graphics to extend Switch’s life cycle.
Nintendo’s and Sharp stocks are gaining. 7974: TYO is up 4.62%, 6753:TYO is up 3.69%
