X-RAY specialist Bede is looking forward to a "feast" in 2004 following three years of "famine".

The Durham firm suffered in the industry-wide downturn that hit the semiconductor markets three years ago.

But there are signs that a resurgence is on the way, and Bede is well placed to capitalise on it.

An analyst's note from brokers Evolution Beeson Gregory said: "Indicators in the semiconductor equipment sector are more positive now than at any point in the last three years. The semiconductor equipment sector is a highly cyclical industry.

"Following three years of famine, the industry looks set to enjoy a feast in 2004."

James Rainbow, divisional director at Wise Speke, said: "Although Bede's third quarter results demonstrated how difficult their market has still been, it was very encouraging to see a pick up in the order book from the 2nd quarter, and indeed from the same period last year.

"Over the last few months, we have seen a recovery in the semiconductor market and I expect this to continue. Bede is well placed to benefit from this, and from reduced costs and a healthy balance sheet."

Bede has a net cash balance of £3.3m after a successful share placing, and analysts are predicting it will hit profitability by 2005.

Sales fell £1m short of analysts' predictions of £5.1m, but that was blamed on timing issues with sales of new technology expected to spill over into the New Year.

Increased acceptance of the X-ray technology pioneered by Bede and strengthening of demand in target semiconductor markets has led to a healthier order intake of £1.4m for the past quarter, compared with £500,000 for the same period last year.

Neil Loxley, chief executive of Bede, said: "We are encouraged by the increasing acceptance of X-ray metrology and the continued strengthening of demand in our target semiconductor markets, both of which are now beginning to translate into increased order bookings and sales.

"We believe that the group is ready to exploit anticipated increased spending by this sector in the next two years, and can secure a share of the multi-billion dollar semiconductor metrology market."