THE semi-conductor industry seems to be stabilising, it was claimed yesterday.

The claim came in the wake of Irish IT firm Parthus Technologies announcing it had achieved profitability ahead of schedule.

The chip design firm from Dublin generated underlying earnings of 66,000 US dollars (£43,857) in the second quarter of the year.

Parthus had hoped to break even in the current quarter, but said that it had benefited from further growth in licensing and royalty revenues.

The group designs chips for use in devices such as personal audio players, mobile phones and Microsoft's video games console, the Xbox.

These signs of a steadying semi-conductor industry were welcomed in the North-East last night.

The region has several businesses involved in the industry, including Filtronic in Newton Aycliffe, and the sector has had its share of problems.

Filtronic took over the County Durham site after Fujitsu closed in December 1998. In the past Siemens mothballed a North Tyneside plant.

Last night, Dr John Bridge, chairman of regional development agency One NorthEast, said: "This is good news. The semi-conductor market is a very good indicator of general business recovery.

"We are beginning to see signs of recovery in the North-East's economy, business confidence is rising.

"Positive changes in the semi-conductor market is good news."

Parthus said the semi-conductor industry remained challenging but added ''there appears to have been a stabilisation in market conditions''.

But it added its short-term forecast was in line with industry projections of flat revenue for the second-half of the year.