yes it does.
how couldnt it?
the wii is running off hardware a little better than the gamecube, its last gen graphics, if that cant be produced fast and in large enough numbers nintendo has a serious problem. and it cant be because of the wiimote or sensor, because wiimotes are easy to find alone and 2 candles could be a sensor bar.
Actually the technology that they are using to make Wii's is new... For the processor they are using a 90 nm lithography process which was the same as the xbox 360 until recently and the newest process AMD was using at the time. The die size for Broadway is small so they should be able to get a lot per wafer. For the size and power used you are getting some really good power and top notch technology.
For production there's a lot of factors though its not as easy as u think to increase production. Ramping factories up to full capacity is the easiest way to increase production of course. If that is a fact, then they need to either buy more factories or give out more contracts which they could lose a lot of money from if they over shoot the demand or if/when demand drops.