German semiconductor maker Infineon has announced a reduction in losses during the three months to June.

The company said its losses were cut to 76m euros (�48.6m; $76.7m) during the quarter from 371m a year ago and from 108m euros during the three months to March.

Sales rose 10% compared with last year and 1% compared with the previous quarter.

Widespread cost cutting and steady demand for computer chips enabled it to improve its performance, the company said.

"Infineon continued to improve its business performance and gained market share in an ongoing difficult market environment," said chairman Ulrich Schumacher.

"We made further progress in cost reductions and increased revenues as well as improving our earnings."

Earnings from sales of electronics used by the communications and the automotive sectors strengthened despite tough price competition and adverse market conditions for memory products.

Infineon's result was better than expected, but the figures failed to impress investors.

The company's shares were trading 3.5% lower by midday in Frankfurt.