Ship is different than sell. I suspect they expect a bullish year, but also imagine they set a target of 20 million units to:
1). Get the stock levels from impossible to find to readily available anywhere. I really don't think the scarcity helps their situation, they should want to move units now, especially given the fanfare for Zelda and leading up to a new Mario game by the end of the year. They want to ramp up their install base quickly so their console is an attractive ecosystem for 3rd party & indies, where viable.
2). Possibly get price breaks on a higher volume of units being manufactured. I doubt Nintendo ever got the benefit of doing this with Wii U, especially given the unique nature of the console. Given the relative off-the-shelf nature of the Switch (joycon notwithstanding), I imagine they can get their manufactured cost down pretty significantly if they place pretty significant purchase orders with their manufacturing partners.
I also imagine we're far enough away from a hardware refresh to where they're not afraid to build up their stock if it doesn't fly off the shelves.