Chipmaker's uncertainty over market

Wolfson Microelectronic chips are used in the likes of TomTom satnav systems.

Chipmaker Wolfson Microelectronics has warned of lingering uncertainty in consumer markets despite better than expected results.

The Edinburgh-based firm - which makes chips for products such as mobile phones and TomTom car navigation systems and flat-screen TVs - said second-quarter revenues rose 32% on the first three months of 2009.

But the jump mainly reflected aggressive destocking earlier in the year as its customers used up stockpiles. Wolfson added that visibility on consumer demand "continues to be poor" and order levels "volatile".

The company - which also makes chips for the Apple iPhone 3G and XBox games console - made pre-tax losses of 6.8 million dollars (£4.1 million) in the first half, compared with 9.1 million dollar profits (£5.5 million) the previous year.

Asian markets are proving more resilient and accounted for more than 75% of the group's 58.4 million dollar (£35.4 million) first half revenues, the firm said.

Wolfson chief executive Mike Hickey also hopes an array of new products aimed at delivering smaller, more efficient and higher-quality sound will help it combat uncertain markets.

"Whilst end market demand visibility remains poor and ordering patterns 'choppy', we have refreshed our product portfolio with exciting new products which are gaining significant market traction," he said.

The company, which employs 280 people in the UK, is also keeping a tight rein on costs, and setting up a new design centre in Newbury which will consolidate bases in Swindon and High Wycombe.

Shares in Wolfson slid 2% on concerns over prospects. Panmure Gordon analyst Nick James said: "The results are ahead of expectations driven by better revenue, however the outlook is weaker than expected."