Why would theh manufacture 16M and ship only 12M?

To have stocks or maybe because production currently is cheap.

Just Milk Pokemon and they're good.

Isn't it too early to come to such a conclusion? I mean.. they should've wait a month or 2 to see how much the sales decrease, because they will.

Or they've got Pokemon Stars which pushes the visuals of the switch then 16 million are not enough.

Thats not how things work, next month they will have financial meeting and they need to say how much Switch they planned to sell for whole FY year. With great launch, great demand, probably some new games (maybe Pokemon for holiday season), they think they will sell 10m in FY 2017. (March 2017. is FY 2016).

Even if it doesn't work like that, I will patiently wait for them to make yet another announcement of lowering expectaitions. Would be nice if I am wrong.

Expecting things is such a nice thing to do.

Point that they doubling planned production means they seeing much more demand than they initial thought will be.

In any case, this is positive.

I have them at 8m. Their games are too scattered right now, but we'll see what E3 does for them games wise.

Their goal completely depends on:

April - October numbers (have to sell 100k per week)
Holiday sells (so bundles, pricing, games, promotions)
And releasing / announced games for 2017 and early 2018 (Smash & Pokemon will get them there effortlessly)

You have to have an estimated target for business reports over the next year, you can't just wait and decide as that's disastrous for business.