X-RAY technology specialist Bede has increased staff by more than a third as it prepares for its first profitable year.

The Durham company made a loss of £2m last year, down on £4m losses the previous year, but expects to make a profit of about £500,000 this year.

Bede has spent the past year investing in the business, which specialises in the semiconductor market. It produces x-ray metrology tools for semiconductor manufacturers, which can pinpoint problems as the manufacturing process is taking place, making quality control more efficient.

Sales last year increased by 80 per cent, and Bede has seen a record order book of about £5m in the first quarter of this year.

Chief executive officer Neil Loxley said: "We made substantial strategic investment last year to bring the business into the semiconductor market and achieve break-even or profitability on a quarterly basis.

"The expectation is that we will be profitable for the full year of 2005."

The company increased its staff by 40 per cent to 150, with 100 in Durham and others in Prague and the US.

Dr Loxley said: "We moved away from the general market to focus on semiconductors and we had to build a substantial infrastructure to do this.

"We expect to move forward much more rapidly as a result.

"Last year, we had a market share of something like 14 or 15 per cent, but the market itself is expected to quadruple, which is the key issue for us."

In 2003, Bede suffered as the result of a downturn in the global semiconductor market, but new markets in the Far East - in China, Taiwan and Japan - have helped pick it up.

About 90 per cent of Bede's products are exported, with most going to Europe and the US.

The company expects the Asian market to increase significantly in the next few years.