Original: Some potentially disturbing news has surfaced today that the Wii U might be in more trouble than you think. This time, however, the issue has nothing to do specifically with the games or sales of the console, but with the production of said hardware.
Recently, the semiconductor manufacturer Renesas Electronics posted its quarterly financial report, which outlined its significant losses and impending restructuring of the company. As part of that restructuring, Renesas announced that it decided to close four semiconductor plants in Japan within 2-3 years, including the state-of-the-art factory based in Tsuruoka, Yamagata Prefecture. So how exactly does this relate to the Wii U? Simply put, the closing factory was responsible for manufacturing the console’s Embedded DRAM — quite properly defined as the “life stone” of the console.
The production of the 1 cm-wide semiconductor for Nintendo was responsible for more than half of the load of the factory at peak times, but the slow sales of the console determined a reduction in demand and a gap in the usage of the machinery and personnel, forcing the plant to run at a loss.
“The closure of the plant won’t have immediate effects on the production of the Wii U,” Nintendo told the Japanese Magazine Weekly Diamond
What Nintendo neglected to mention was that there could potentially be grave long-term effects for the console. I’m talking Nintendo being forced to come out with a new console earlier than anticipated longer term effects.
Now I know what you’re thinking: Nintendo should just make arrangements for another company to manufacture the component, right? Perhaps that’s what Nintendo is already looking into; however, this is actually a much more tedious task than one might assume. According to a Renesas executive, the production of that semiconductor was the result of the “secret sauce” and state-of-the-art know-how part of the Tsuruoka plant’s NEC heritage, deeding production elsewhere difficult. In order to restart mass production in a different factory, redesigning the component may be required.
Ultimately, because of this, Nintendo should be seeing an increase in the costs to produce the console in the long run, due to having to move to a separate location to produce the parts along with having to possibly redesign the embedded RAM component.