Vimicro International Corp<VIMC>, a chipmaker based in Beijing, expects to break even this year after two consecutive years of losses, according to sources citing Chairman John Deng as saying.

Deng said that the company, like other Chinese technology companies, has recently been able to create more products and generate more revenue in the domestic market than in overseas markets, which is a major change for Vimicro. The company’s sales in domestic markets surged to about half of total revenue in 2009 from only 10% to 20% in 2005, fueled by economic recovery.

In the fourth quarter last year, China’s economic growth recovered to 10.7% from 6.2% in the first quarter of last year. The Chinese government cut taxes and provided subsidies to stimulate consumer spending.

Vimicro's semiconductors are used in personal computers and mobile phones made by foreign and domestic companies.