Jan. 29 (Bloomberg) -- NEC Electronics Corp., Japan's third- biggest chipmaker, rose the most in a month in Tokyo trading after the company reported a narrower third-quarter loss because it reduced research and employee costs.

NEC Electronics climbed 5 percent to 1,966 yen as of 9:23 a.m. on the Tokyo Stock Exchange, compared with a 2.5 percent gain in the Nikkei 225 Stock Average. That's the biggest increase for shares of the Kawasaki-based company since Dec. 21.

The net loss shrank to 936 million yen ($8.7 million) in the three months ended Dec. 31, from 5.75 billion yen a year earlier, while sales fell 4 percent to 170.8 billion yen, NEC Electronics said yesterday.

NEC Electronics kept its forecast to break even at the operating level in the year ending March 31, after cutting 14 billion yen in expenses the past nine months. The company focuses on chips used in cars and electronics such as Nintendo Co.'s Wii console and plans to trim costs further to bolster profitability, including slashing its handset research budget by half next year.

To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net

Last Updated: January 28, 2008 19:36 EST