X-RAY specialists Bede plc has expressed a "cautious optimism" to the City after seeing the beginnings of an improvement in its order books.

The company has been hoping for a resurgence in the semiconductors industry, believing it is well placed to take advantage of any recovery.

The Northern Echo revealed earlier this month that the Durham firm was on course to expand to six times its size during the coming few years if the expected upturn in the market is realised.

Neil Loxley, Bede chief executive, said: "People are looking forward again.

"There is an acceptance that if you are still here now, and in good shape, you have a future.

"There is a market there, the only real uncertainty is when this market spends some money again."

Bede is at the cutting edge of technological development in an industry where customers are looking for the best possible competitive advantage.

The company battled in the early days to convince potential customers that X-ray metrology was necessary for next generation semiconductor manufacturing processes.

However, signs of a recovery are there with a book to bill ratio - the comparison of sales to shipments - of 1.3.

This has been made possible by some difficult decisions, with the company slimming down its cost base by 20 per cent to £2.6m, and a shares placing to pull together a £3.6m war chest for future projects.

Mr Loxley told the stock exchange: "Recent improvements in the trading climate and strong customer interest for our products give us increasing confidence in the opportunities for Bede as the semiconductor industry invests in next generation semiconductor materials metrology.

"The directors are committed to realising the value of the previous investment by driving sales and fully exploiting the potential of its world-class intellectual property and skilled workforce."

The Asian market is expected to provide a good proportion of growth and revenue in the future.

A statement to the City said: "The return of this market, which declined severely in 2002 following the slump in the global telecommunications sector, provides the group with a steady revenue stream to underpin future expected growth in the broader silicon-based semiconductor markets."