While the original Wii, launched in 2006, became a huge hit with sales of 101 million units, its successor Wii U was a flop -- with mere 13 million units sold.
Nintendo did not suffer alone, though. Renesas Electronics, the manufacturer of Wii U's key semiconductors, also took a hit, and the Japanese chipmaker has continued to struggle with the negative legacy of this failure
The chipmaker had already made a fortune on the triumph of the original Wii, and management highly expected the Wii's successor to further benefit the company.
Hopes were high that production lines would be maxed out with the debut of Wii U. However, optimism quickly turned to disappointment after Wii U was launched in December 2012. Urged to raise the operating ratio of production lines at the Tsuruoka factory, the chipmaker "was obsessed with getting as many orders as possible, regardless of profitability," according to a former Renesas employee.
The manufacturer received large-lot orders for automotive semiconductors, which typically come with the burden of having to supply parts over the long term. These loss-making orders continued to affect the bottom line even after NEC Electronics was consolidated into Renesas Electronics in 2010, said the former employee.
As part of restructuring, in 2013 Renesas stopped supplying chips to the gaming and smartphone market, where demand is often volatile. The Tsuruoka plant, once the key production site for Nintendo consoles, was later sold to Japanese electronics makers Sony and TDK separately.
