MANAGEMENT at a semi-conductor plant described by PM Tony Blair as "rising like a phoenix from the ashes of Fujitsu", say it is still on course for its planned development, despite being no closer to making a profit.

Filtronic moved into the former Fujitsu microprocessor plant in Newton Aycliffe in a blaze of publicity in August last year, promising to deliver more than 500 new jobs.

The move heralded a new lease of life for the site which closed in 1998 with the loss of 570 jobs.

Now, more than a year later, Filtronic plc has admitted it is no closer to making a profit from its semi-conductor products

But the company, which currently employs 100 at Newton Aycliffe, remains upbeat, and reiterated last night it is still on course to recruit more staff and develop the site as planned.

A spokesman for Filtronic said: "The development of the plant and processes remain on schedule."

In a trading update Filtronic said that over the last few months its County Durham site had developed a range of added-value semi-conductor products for use in the optical market, as well as mobile handsets and base stations.

The report reads: "These key product developments are strategically directed towards integration into higher added value subsystems for our major businesses.

"Nevertheless, it remains difficult to estimate when high volume demand will materialise and therefore when the Newton Aycliffe site will become profitable."

Regional development agency, One NorthEast, who worked closely to help bring the business to Newton Aycliffe, also remained confident of its success.

Chief executive Mike Collier said: "We obviously have a vested interest in Filtronic's presence in Newton Aycliffe, and its on-going success in the region.

"Given that this is a relatively new investment, that the semi-conductor sector remains fairly strong and the telecommunications market so broad, we are confident that Filtronic will continue to thrive."

In June Tony Blair visited the site in his constituency to officially open the operation.

Mr Blair took the opportunity to pay tribute to Filtronic, and heard how the firm expected to create hundreds of jobs at the site over the coming years

The factory is the only one of its kind in the UK , and remains the biggest in the world.

The company, based in West Yorkshire, has said its potential is enormous and last night said the orders will come in.

Filtronic has enjoyed remarkable success since the company was started in a garrage 23 years ago. Many of the employees who joined two decades ago are now very wealthy, and the British world-beater numbers around 30 millionaires among its ranks.

The group is now worth more than £2bn, and its trading update concluded: "We continue to invest in new product development where we believe there are significant market opportunities and where they have synergies with our existing businesses.

"Our two major businesses continue to trade strongly and profitably, to increase their market share and to supply highly customised products to the principal wireless communications.

"Our position in the forthcoming third generation base station and handset markets is excellent and will be further enhanced by the introduction of our range of high performance compound semiconductor devices from Newton Aycliffe.