NEC smiling despite financial loss

NEC Electronics suffered operational losses to the tune of 5.8 billion yen (about $50 million) during its first quarter of 2006, according to Tech On, Nikkei Business Publications' consumer-electronics news site. Still, it was an improvement of 2 billion yen (about $17 million) from the previous quarter.

NEC CFO Hiroshi Sato was pleased with the progress. "We are producing steady results towards our goal of becoming profitable during fiscal 2006," he said.

One reason for this optimism is that NEC's system-on-a-chip sales are expected to grow nearly 20 percent during the current July-to-September quarter--largely thanks to the company's work on Nintendo's Wii. Of the company's projected growth, 80 percent is slated to come from supplying NEC's system LSI chips to Nintendo for use in the console.

To keep up with Nintendo's demand, NEC plans to nearly double production at its Yamagata plant by the end of its second fiscal quarter.