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Digital wallet versions of those cards still work fine, though. I visited Japan a month ago and found that on iPhones or Apple Watches you don’t even need a special app — the stock Wallet app can generate new virtual Suica, PASMO, or ICOCA cards on demand.

That's not correct. The Welcome Suica IC card is still issued. https://www.jreast.co.jp/multi/en/welcomesuica/welcomesuica....

IIRC it was the temporary ones not being issued. There are IC cards that are "branded" to only function for a month (or 3?) meant travelers. But they have decided to save the chips for standard IC cards.

I haven't been there since May, so I heard that the chip shortage is affecting new IC cards, although your sentence seems to indicate that's a permanent change?

Anyways there are still plenty of people with IC cards even if they stopped issuing new ones. Most people have probably had theirs for years.

Not true. I bought a new Icoca recently.