The chip glut and PC sales slowdown has caused NEC to slash its annual earning forecast by a third.

It now expects to make profits of 60 billion yen ($516 million) for the year to 31 March instead of 90 billion yen. Sales are expected to hit 5.4 trillion yen, 1.8 per cent below earlier forecasts.

For the full year, semi-conductors and flat panel displays are forecast to earn it 70 billion yen ($602 million), down 42 per cent on earlier estimates.

At a press conference NEC's executive VP Shigeo Matsumoto said profits from DRAM will fall 40 billion yen ($344 million) short of previous forecasts and PC profit will be 24 billion ($206.4 million) yen below estimates. ®