Nintendo Supplier Withdraws Outlook Citing Chips Uncertainty

Hosiden Corp., a major assembler of Nintendo Co.’s Switch console, withdrew its fiscal year sales forecast citing difficulties procuring electronic components.

The Osaka-based company said uncertainty about its own and its clients’ ability to secure sufficient chips pushed it to retract its previous outlook in a filing to the Tokyo Stock Exchange Thursday. More than half of Hosiden’s revenue comes from its Nintendo business, according to company documents, suggesting Switch console production may be falling behind schedule.

Nintendo reports earnings on Wednesday. The company has said it plans to sell 21 million Switch units in the fiscal year ending March. A company representative declined to comment.

Hosiden shares surged as much as 14% in Tokyo on Friday after the assembler reported better-than-forecast earnings for the April-June period and consequently upgraded its forecast for the half-year term ending September. The weakened yen boosted those results, however currency volatility and semiconductor procurement uncertainty made it unfeasible to offer a reasonable projection for the full year, the company said.

“The newest outlook by Hosiden shows production is likely to decline in the July-September quarter from April-June, which should be the other way around for the entertainment business, which tends to ramp up output in the buildup to the year-end holiday season,” Toyo Securities analyst Hideki Yasuda said. “This suggests its client’s fiscal year plan is becoming harder to achieve.