Chip Stocks Win With Wii

ADI is also adding additional capacity at external foundries to support the increased demand for the product. ADI's stock closed up 44 cents, or 1.2%, to $36.65 Friday, about 10.5% down from its 52-week high of $41.10. The stock has been up 12% since the beginning of the year.

Broadcom, whose Wi-Fi and Bluetooth technologies help the Wii remote talk to the console, could be another winner because of the Wii.

"Broadcom will definitely profit from the Wii," says Quirk. "They were quick to announce that they got a design win on the Wii, and though this may be a small part of their overall business, it could drive their growth."

The company closed at $30.62 Friday, down about 18% from its 52-week high of $37.50. The stock is down about 5.5% since the beginning of the year.

There's also Qimonda, which is trying to differentiate itself from other memory chip suppliers, by focusing on non-PC DRAM. Qimonda leads the market as the supplier for game console markers, with Samsung as its rival.

But higher margins in the specialty DRAM business compared with its more commoditized PC-DRAM-supplier rivals could make Qimonda an attractive play.

"The success of the Wii would likely have a greater impact on Qimonda than Samsung due to the importance of its specialized chip and its smaller market cap," says Ehrenberg.

Qimonda also faces competition from Elpida, whose chips have been spotted within the Wii.

Qimonda closed up $1.03, or 6.8%, to $15.97 Friday. The stock is, however, down 7.5% this year.

And then there are companies like IBM(IBM) and AMD(AMD), who are part of the Wii but could see little to no upside from the console's success.

Though IBM and AMD are part of all three game consoles, Wii, PS3 and Xbox 360, revenue from the games business is likely to be a small part of the company's business. "IBM is just so massive it is hard to imagine a meaningful impact on their stock," Ehrenberg says.

Nicknamed "Broadway," Wii's processor comes from IBM; graphics chipmaker ATI, which was acquired by AMD last year for $5.4 billion, makes the graphics processor for the console.

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