Most of Israel's hi-tech companies are slashing staffing and salaries, but U.S.-Israeli company Chip Express Israel is expanding.

The company's local R&D outfit, which employs 40 people, plans to expand its workforce by 10%.

The semiconductors is in a slump, this is true. But Chip Express, located in Haifa's Matam hi-tech park, is situated at the beginning of the semiconductors food chain, explains its VP European Sales & Marketing, Alon Kapel.

Demand for its chip design solutions is growing, Kapel said.

The Haifa facility focuses on designing next-generation Chip Express products using 0.13 micron technology.

The company's first-half figures do not shout "upswing" but Kapel is firm about the company meeting $48 million revenue for 2003.

The company saw a 42% drop in revenues to $4 million for the second quarter of 2002. Its quarterly loss grew to $1.7 million. However, the company reduced its operating costs to $5.7 million, from $7.1 million in the parallel quarter of 2001.

Chip Express was founded as an Israeli company in 1985, by Zvi Orbach, who ran it until 1998. Its headquarters moved to California, but it maintains an R&D center in Israel.