Samsung Chip Price Hike Could Make the Switch 2 More Expensive

Rising semiconductor and memory costs are putting fresh pressure on Nintendo as it tries to keep the Switch 2 affordable.

The Nintendo Switch 2 may have another problem brewing behind the scenes, and this time it has nothing to do with games. The cost of making the console could be rising as semiconductor prices continue to climb, with Samsung reportedly increasing prices for several of its chip manufacturing processes.

According to the sources, Samsung raised prices in July for chips produced using its 4nm SF4 process. Wafer prices for its 5nm SF5 process reportedly rose by 10% to 15%, while its older 8nm technology rose by nearly 10%. That last figure is particularly interesting for Nintendo because the Switch 2 reportedly uses an 8nm chip.

A 10% increase might not sound huge at first, but when a company produces millions of consoles, those extra costs can add up quickly. And Nintendo is already dealing with another headache: memory prices. The ongoing AI boom has pushed demand for memory and other semiconductor components much higher.

Data centers are buying huge quantities of hardware, leaving companies across the technology industry competing for limited supplies. Nintendo is no exception. So what happens when a console maker tries to sell a new system to millions of people while the parts inside it keep getting more expensive?

That is the problem Nintendo could increasingly face.

The Switch 2 is still in an important stage of its life cycle. Nintendo wants as many people as possible to move from the original Switch to the new console, because a larger player base means more software sales and a stronger platform for developers. Keeping the hardware price attractive is therefore extremely important.

Unfortunately, rising manufacturing costs make that job harder. Nintendo has already announced a price increase that will push the Switch 2 to $500 in the US. According to the sources, that increase was not enough to completely offset the higher costs Nintendo is facing behind the scenes. If chip and memory prices keep rising, the company could face even more pressure.

The situation is particularly awkward because simply raising the price again is not an easy solution. A $500 console is already a significant jump for many players. If Nintendo eventually had to push the price toward $550 or even $600, the company could have a much harder time reaching the mainstream audience it wants. At that point, Nintendo might have to get creative.

Instead of another hardware price increase, the company could lean more heavily on bundles that include games. That would make the higher price easier to swallow while giving customers something extra for their money. Of course, none of this means the Switch 2 is definitely heading toward a $600 price tag. Nintendo has not confirmed another increase.

The bigger concern is what happens if semiconductor and memory costs remain elevated for another year.

Older chip technology was once expected to be a cheaper and easier option. But with demand rising across the entire semiconductor industry, even older manufacturing processes are feeling the pressure. For Nintendo, the timing could hardly be more inconvenient. The company needs to sell a lot of Switch 2 consoles, but every increase in production costs makes that mission a little tougher.

The Switch 2 has plenty of games and momentum on its side. Still, if manufacturing costs keep climbing, Nintendo may eventually have to choose between protecting its margins and protecting the console's price. So, how high can the Switch 2's price go before even Nintendo's strongest games aren't enough to make it an easy purchase?