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The global call for Nintendo (OTC: NTDOY) is so wonderful for its Switch hybrid cellular gaming console that it would require providers to produce enough pieces for 25 million games this year, 3 million more than it ordered just 4 months ago.
A mix of house orders due to the coronavirus pandemic and popular exclusive game titles like Animal Crossing: New Horizons and Mario Kart 8 Deluxe has created scarcity, first of the Switch console, after the Switch Lite, which basically differs by not being. connected to a TV.
Nintendo says it sold more than 3 million Switch consoles in the last quarter and another 2.6 million transferred Lites, 167% more than last year for the Switch family. It has also sold 10.6 million copies of Animal Crossing and 2 million copies of Mario Kart 8.
This helped increase Nintendo’s inventory by 20% by 2020, however, it has increased by 44% since COVID-19 declared a pandemic in early March and has increased by 60% since market lows later that month.
But investors may need to be vigilant to Switch component vendors, as they are also expected to gain advantages from Nintendo’s call to produce millions more devices. Software and hardware have been improved from the initial production of transfer to functionality and battery life, and subsequent semiconductor stocks play a key role in the success of the transfer.
Switch’s wireless wireless chipsets for wireless Bluetooth were Broadcom’s designs, but Cypress Semiconductor acquired them when it bought the Chipmaker’s Internet of Things business several years ago. However, Infineon (OTC: IFNN. And) is now the new owner, having completed its acquisition of Cypress for $10 billion last April.
Cypress’ connectivity and microcontrollers division, where those chips, the largest component of the company’s business, resides, accounting for 72 percent of its $2.2 billion in annual revenue. Infineon, however, generates about $9 billion a year, suggesting that Switch factors might not move the needle too much.
Maxim Integrated (NASDAQ: MXIM) supplies the transfer with two three-phase down controllers, which control voltage, and incorporate force control circuits that are used to force small battery devices.
This means that there are many products in many industries that involve Maxim components, especially automotive, its largest segment represents 28% of revenue. The customer market, of which gaming devices are a small component, accounted for 18% of sales.
The system-on-chip processor founded on NVIDIA’s Tegra X1 (NASDAQ: NVDA) at the center of the switch, but Nintendo’s recent update to the console is expected to come with NVIDIA’s new 16 nanometer chip instead of the older, less effective 20 nanometer chip. .
NVIDIA’s Tegra processor segment, which also included its Synthetic Intelligence Computing Platform Shield and AGX, accounted for 13% of its annual profits last year; however, with the first quarter of 2020, NVIDIA reorganized its graphics, computing, and network segments, so Tegra’s contribution is no longer so simple.
STMicroelectronics (NYSE: STM) supplies the Switch with a 6-axis accelerometer and a gyro sensor and traditional touchscreen controller. There is also an STM microcontroller at the base.
A transfer disassembly also that Texas Instruments (NASDAQ: TXN) supplies a battery charger for the console and a DC-DC converter at the charging station. There is also a battery charger in the Joy-Con controller accessory.
Many corporations also have their chips and parts in the charger and Joy-Cons, as well as in Switch Lite. I don’t want to play with what works.
The popularity of Switch, Switch Lite and exclusive console games (not to mention those that don’t own the platform) will certainly bring advantages to all the corporations that contributed to its construction.
However, even Nintendo’s 25 million equipment order increase won’t leave a big mark on your business, if only because your parts are also widely distributed across other devices and industries. This means that making an investment in Nintendo remains the most productive way to capitalize on the disproportionate expansion of the gaming platform.
While Nintendo sells the console at a loss, depending on the load of its components, in the path of the knife and blade, the giant of the customer’s electronics is making a difference in the games and accessories that pass with it, and it seems like a strong expansion trajectory in which it finds itself.