Tuesday, June 27, 2006

Wii Chip Orders Boost Profit Forecast For NEC.

Japanese electronics manufacturer NEC Corp has forecast a 5 billion Yen operating profit for fiscal 2007, boosted by increased demand for its semiconductors in products including the Nintendo Wii.

Japan's third-largest chip manufacturer has successfully reduced production and development costs, securing contracts to supply chips for Sony's Bravia flat-panel televisions, Toshiba's DVD recorders and Nintendo's forthcoming console, Wii.

If the company meets its projections, it will mark the first operating profit in over a year, a substantial difference from the 35.7 billion Yen loss in fiscal 2006. NEC has already committed to upgrading its Yamagata factory production to meet Nintendo's demand for the Wii's LSI (large-scale integration) chips, expecting to complete the changes by September.

In an additional link with Nintendo and its new console, NEC will be partnering with Hudsonsoft to offer Turbo-Grafx-16 titles, which will be made available to download via Nintendo's Virtual Console service.

Shares in NEC rose sharply following the announcement, showing the largest gain in more than four months for the company. NEC is set to increase it spending on equipment to 100 billion Yen this year, planning to produce more than 11,000 semiconductor units per month as the firm battles its way back towards profitability.

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