FILTRONIC is on course to meet its 500 jobs pledge - despite concerns over the slowdown in the sale of mobile phones.

The firm, which bought the old Fujitsu microchip plant in Newton Aycliffe, County Durham, is looking for a partner for its compound semi-conductor business.

Last month, The Northern Echo revealed that the Filtronic Newton Aycliffe facility, which employs about 100 staff, was costing more than £1m a month to run.

Bosses said the compound semi-conductor branch of its business, made up of the Newton Aycliffe plant and a second operation in the US, was a "significant drain" on its resources.

They decided to split the company in two and opened talks to bring in a commercial or financial partner.

However, industry analysts say uncertainty about the future of the mobile telephone market could make the search more difficult.

Aycliffe was bought to manufacture chips for the next generation of mobiles. However, the downturn in the market has raised fears that the third generation mobiles may not be as successful as hoped.

Japanese chip manufacturers NEC and Matsushita, which supply the mobile phone industry, have said they will not be making as big a profit as previously estimated.

Filtronic chiefs have said the Newton Aycliffe plant will remain open and there are no plans to lay off any of the staff.

Managers said that they still expect to create the 500 jobs originally envisaged when Filtronic bought the mothballed Fujitsu factory 16 months ago.