STMicroelectronics revised up its forecast for the global semiconductor market yesterday, a day after reporting quarterly sales exceeding analysts' forecasts although the net loss increased sharply.

"We think that the market will contract by less than 20 per cent this year," chief executive officer Carlo Bozotti said, in contrast to an earlier forecast of a 25-per cent fall.

He also told a telephone press conference: "We will definitely do better than the market." The company is a French-Italian maker of semiconductors.

The business monitoring grouyp Gartner forecast at the end of May that the market for computer chips would fall by 22.4 per cent in 2009.

STMicroelectronics had reported that in the second quarter its sales fell by 16.6 per cent from the equivalent figure last year to $1.99 billion (€1.4 billion) but this was above the group's target of $1.73 - $1.93 billion dollars. It also exceeded the forecast by brokers at Santander bank of $1.88 billion.

Mr Bozotti said: "Our performance is better than what we expected."