MegaChips Corp. reported a 19.7% increase in annual net profit to ¥5.37 billion ($37 million) for fiscal 2025, defying a significant drop in sales as Nintendo’s hardware transition weighs on the Japanese semiconductor supplier.
Revenue plunged 27% to ¥42.33 billion ($291 million) while operating profit tumbled 60.1% to ¥2.19 billion ($15 million), according to the company’s statement on May 14. The Osaka-based firm primarily supplies Nintendo with game software storage LSIs and other components for consoles and peripherals.
The steep revenue decline stems from reduced demand in both its amusement business and ASIC operations, where customer inventory adjustments have taken a toll. Nintendo’s transition between console generations particularly impacted the company, with the Switch 2 scheduled for release on June 5 after selling over 146 million original Switch units since 2017.
For fiscal 2026, MegaChips forecasts essentially flat revenue of ¥42 billion ($289 million) with a 37% increase in operating profit to ¥3 billion ($20.6 million), suggesting improved margins. However, net income is projected to decline 25.5% to ¥4 billion ($27.5 million).
Industry analysts expect Nintendo to sell approximately 15 million Switch 2 units by March 2026, potentially boosting component suppliers like MegaChips once initial inventory adjustments are complete.
