We can look to the Lite as to how they could scale production to the levels needed to meet demand in Japan. These are separate production lines and they can scale the less complex one faster.
They shipped 5M Lites in it's first two-quarters WW, and over 1.2M of those were sold in Japan.
Right now according to Famitsu, Lite is at 1.36M for the year compared to 1.56M for the OG Switch. At the same time last year OG Switch was 1.66M, so that's just a 100K difference. Even if we don't see a substantial increase in OG Switch sales until the end of the year(let's say they end up at 4M), the chance for high growth and 7M results will be decided if they can scale up Lite production line and see the increase from there. I don't think 3M for the year for the Lite is that difficult to achieve.
When we are talking about increased production this is one thing to really keep in mind, OG Switch Production could remain 20M for the year but Nintendo could scale Lite production to 10M and ship 1/3 of that to Japan to ensure there is ample supply there for the holidays. In that case, we would be looking at a Historic Holiday ahead, and a lot of companies that have a decent lineup for the Switch this year will be able to actually capitalize on this.
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