NEC Predicts Profits On Wii Chip Orders

A new report from news agency Bloomberg indicates that Japan-based electronics manufacturer (and former console hardware creator) NEC Electronics has forecast its first operating profit in more than a year, based on orders for semiconductors used in consumer electronics including the Nintendo Wii. NEC was last profitable in the quarter ended March 2005, but now forecasts an operating profit of 5 billion yen ($44 million) for the year ending March 2007, compared with a 35.7 billion yen loss for the year previous. NEC Electronics CEO Toshio Nakashima confirmed in late April during the company's annual earnings announcement that it entered into an agreement with Nintendo to produce large-scale integration chips (LSIs) for the upcoming Wii console. Nakashima noted in the call that NEC had begun plans to upgrade the production capacity at NEC's Yamagata factory to keep up with Nintendo's demand for the chips, with the improvements scheduled to be completed by September. In an earlier sign of support for the Wii, NEC also confirmed in March at GDC that it had partnered, alongside partner Hudsonsoft, with Nintendo to offer TurboGrafx-16 video games for download over the upcoming Wii's Virtual console. According to the Bloomberg report, NEC Electronics is projecting a return to profit as it focuses on semiconductors that can be used in more devices, while the company continues to focus on lowering production and development costs.