WORKERS at a beleaguered North-East microchip plant are bracing themselves for more bad news next week.

Analysts warned last night that latest losses at Filtronic - hailed as the saviour of the ex-Fujitsu plant in Newton Aycliffe - could be as high as £2m.

The West Yorkshire-based company is due to announce its latest set of financial figures to the City on Monday.

Staff in Newton Aycliffe will be hoping the company has also found a partner to help share the cost of running the microchip plant.

Earlier this year, Filtronic admitted costs at the factory it bought two years ago were running at almost £1m per month. Bosses have been seeking a larger company to act as a financial "white knight" ever since.

Forecasts suggest that it will record a pre-tax loss of between £1.5m and £2m for the financial year ending May 31, 2001. This follows a pre-tax loss of £3.9m which it made the previous year.

Filtronic employs about 100 people at its Aycliffe operation. The factory was supposed to make microchips for mobile phones but has been hit by the collapse in telecoms.

In May, it announced that it was in talks with a leading aerospace and defence equipment manufacturer to run the Aycliffe plant.

It is hoped the new venture will lead to a cash injection to relieve the financial burden on Filtronic.

Filtronic would continue with compound semi-conductor manufacture at Aycliffe, but with a changed emphasis towards defence products.

Executive chairman Professor David Rhodes is expected to reveal more about the tie-up in his statement to the Stock Exchange.

Analyst Vinay Bedi, of Newcastle based Wise-Speake, said: "Technology spending has been hit because of problems with the US economy and this has had a knock-on effect.

"People have stopped investing in technology and as a result the semi-conductor market has been absolutely shot to bits."