Trading Statement

Filtronic PLC
3 May 2000


                                 FILTRONIC PLC
                                       
                  Trading Activity and Business Developments
                                       
In  my statement on 31 January 2000 covering the financial performance of  the
company  during  the first half of the financial year, I provided  a  detailed
summary  of  the  status  of the various business segments  within  Filtronic.
Ahead  of  visits  by  analysts  and investors  to  Filtronic's  new  compound
semiconductor facility at Newton Aycliffe, County Durham, later in  May,  this
statement updates shareholders on each of the four existing business  segments
and announces the formation of a fifth, Broadband Access.

Broadband Access

A  new  business  has  been  created, to address the opportunities  which  are
currently  materialising with respect to the worldwide deployment of broadband
wireless access systems.  The principal products which are being developed are
microwave  and millimetre wave transceivers to support higher level modulation
schemes  consistent with 155 Megabits per second data rates.  Key  aspects  of
the products are the extensive use of microwave monolithic integrated circuits
(MMIC's)  and  automated production equipment for bonding chips directly  into
modules.   To  enable  the  business  to be  developed  more  rapidly,  senior
engineering  and  project management resource has been transferred  into  this
group  from the Electronic Warfare activity in the UK.  The production process
requires a cleanroom environment and will be established in part of the Newton
Aycliffe  facility although engineering support together with some  production
will  be  provided  from Santa Clara for the present.   The  Broadband  Access
business will be headquartered at Shipley, West Yorkshire and will incorporate
the existing cable group.

The  total revenue cost of this activity will be more than £3m in the  current
financial  year including the costs of establishing the business  in  the  UK,
transferring  operations from Santa Clara and the associated restructuring  of
the Santa Clara facility.  Further investment of both capital and revenue will
be  made in the next financial year to establish Filtronic as a leading player
in this exciting new global market.

Wireless Infrastructure

In  January, I indicated that the performance of Filtronic Comtek, Inc. in the
second  half  of the financial year was dependent upon certain CDMA  contracts
for  the  Chinese market.  The relevant system contracts have still  not  been
awarded  by  China  Unicom to our OEM customers.  However, there  has  been  a
sufficient  increase in other customer requirements in the US to  ensure  that
Filtronic Comtek, Inc. is likely to generate profits in the second half  at  a
level  sufficient  to  cover the losses sustained in the  first  half  of  the
financial year.

Our  Australian operation has now secured OEM business in both China and Japan
to  add  to its traditional strength with local operators.  This will  provide
better longer term return on engineering effort.

In  Europe, the business in total is trading in line with expections, although
the  timing of customer programmes has caused increased volatility  in  demand
from  month to month.  As a result of this, the third quarter of the financial
year  was  weaker  than  expected.  However, the fourth quarter  has  featured
increased  demand  from  two major OEM's for their new  GSM  and  PCN  product
offerings  which  incorporate  GPRS  capability.   The  increased  demand  for
infrastructure products due to the capacity requirements of data  transfer  in
addition to voice is expected to be sustained for the foreseeable future.   To
meet  this demand additional manufacturing capacity has been installed in both
the UK and Finland.

Cellular Handset Products

The  Cellular  Handset Products business continues to trade strongly  in  line
with  expectations. Shipments of handset antennas from our  new  operation  in
Suzhou, China have now started.

On  translating  the results of our Finnish operations into  sterling  for  UK
reporting  purposes,  the  weakness  of  the  Euro  against  sterling  has   a
significant  adverse impact.  Since the beginning of the financial  year,  the
Euro  has  weakened  by  approximately 12%.  Subject to  any  further  foreign
exchange movements by 31 May, the impact of this weakness is likely to  reduce
reported profits by more than £1m.

Our  market  share of handset antennas continues to increase with  substantial
demand  for  internal  devices.   Each product  requires  its  own  customised
automated   production  line  and  several  new  ones  have   been   designed,
manufactured and installed in both Finland and China.

The  substantial investment in ceramic diplexer and filter production capacity
continues  with the key element of automatic filter alignment being addressed.
This  is a challenge but we anticipate full operation by September this  year.
A  concentrated effort on solving the algorithmic aspects of the problem  will
also produce results which will have a direct beneficial effect upon the level
of automation possible in the wireless infrastructure business.

The  handset  module  business is now part of the  Cellular  Handset  Products
Group.  In addition to the internal antenna and ceramic filters and diplexers,
the  modules  will contain compound semiconductor devices to provide  transmit
power  and  receive  sensitivity.  These are  being  developed  with  flexible
multiband  capability.   Development work is  continuing  with  three  handset
manufacturers, however, due to the timing of customer programmes,  it  is  now
unlikely that there will be any substantial sales of integrated modules  until
the financial year commencing 1 June 2001.

Compound Semiconductors

The  development  of the production processes at the Newton Aycliffe  facility
continues  on  plan and on budget.  Initial low noise amplifier  devices  have
been  produced on 6' wafers with encouraging results.  Additional professional
engineering staff have also been recruited into Newton Aycliffe to  provide  a
broader  product capability than that achievable from our Santa  Clara  design
facility  alone.  In addition to discrete transistor products,  we  have  also
developed MMIC power amplifiers, low noise amplifiers and multi-throw switches
suitable  for  all classes of handsets and base stations.  This product  range
significantly  increases our prospects in the compound  semiconductor  market.
Production proving and qualification of various devices will continue over the
next few months with volume production expected to occur in the second half of
the  next financial year.  In addition to our own production requirements, the
substantial  output available from the Newton Aycliffe facility  presents  the
opportunity  to  fulfil  global capacity shortages for compound  semiconductor
devices  on a contract basis and a number of opportunities are being  actively
pursued.

Electronic Warfare

Worldwide sales activity in this business is encouraging, however, some  sales
of  complex  sub-systems will be delayed beyond the end of the financial  year
which will result in only a small overall profit for this business segment.

Outlook

Overall,  after  taking into account the investment which  is  being  made  in
Broadband  Access,  which  I referred to above, it  is  anticipated  that  the
operating  profit  before goodwill amortisation for the  second  half  of  the
current  financial  year will be in the range of three to four  times  greater
than  that  reported in the first half (£4.0million), prior  to  charging  any
costs   related to establishing the compound semiconductor facility at  Newton
Aycliffe.

The  growth  in  our  Wireless  Infrastructure and  Cellular  Handset  Product
segments  is  expected to be at least in line with the development  of  mobile
systems  worldwide  for  the forseeable future.  The growth  of  our  Compound
Semiconductor  business  will  be  dependent  upon  establishing  large  scale
production  at  Newton  Aycliffe.  I believe we will  be  successful  in  this
respect and that within 12 months Filtronic will have become a major worldwide
supplier of compound semiconductor devices.

Professor J D Rhodes CBE, OBE, FRS, FREng
3 May 2000

Enquiries:

Professor David Rhodes
Professor Chris Snowden
Chris Schofield
Filtronic plc              Tel: [phone]


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