SEMICONDUCTOR business Filtronic has overcome a period of uncertainty in the global economy with improvements in its mobile phone operations.

The company, which employs 300 staff at the former Fujitsu plant in Newton Aycliffe, County Durham, manufactures transmitting chips for mobile phone base stations along with antenna for mobile phone handsets. Its customers include Motorola and Lucent.

New models helped the company see off tough conditions in the global market, with sales of antennas for handsets rising 29 per cent to £106m in the six months to November 30.

However, the company added that the market for transmitting modules for mobile communications base stations had become unpredictable, although it still managed to increase its market share.

Executive chairman Professor David Rhodes said expectations were for the global market to decline slightly this year, with progress hinging on the roll out of services such as third generation (3G) services.

He added: "Growth in this business remains dependent on both continuing demand for 2G and 2.5G systems and the timing and extent of 3G deployments. Prospects for growth in all 3G systems with our existing products remain strong."

The company said its future performance would also be helped by a substantial increase in shipment of products for the European Fighter Aircraft programme.

With a forward order book of more than £40m, the company's electronic warfare division is expected to be profitable in the second half of the year after sales in the first six months dipped to £11m from £13.7m last time.

Sales across the group in the first six months fell to £123.9m from £146m but a tight control on costs meant operating profits were marginally lower at £5.4m.

Despite taking a £2.7m one-off charge for the closure in October of a facility in the US, Filtronic reported pre-tax profits of £50,000 compared with losses of £4.5m a year earlier.

The performance was helped by lower interest charges following a move to reduce debt and beneficial currency exchange movements.