German computer-chip maker Infineon has reported better-than-feared losses for the last three months of 2001.

Infineon posted a net loss of 331m euros (£204m; $293m) for the final quarter of the year, an improvement on the 523m loss suffered in the preceding quarter.

Although the loss was much more than the 280m deficit recorded a year earlier, it was slightly less than analysts' forecasts.

But the firm warned that prospects for a recovery in the battered chip market remained uncertain, sending its shares down by more than 4% in early trading.

Demand for chips plummeted last year, pushed down by waning corporate demand for computer technology.