[doingitsideways]

Hmm...

I'm probably going to regret getting involved here, but...

The standard turbo setup was developed by Porsche and developed 170-180bhp.
Volvo thought this was too exciting, so detuned them to 120bhp.
The "Richmod" or the later "Roboumod" that Anadinolin speaks of are ecu conversions to essentially bring power back to the originally developed level of 170-ish bhp.
This is done via a modification to the boost/ignition ecu. The fuel ecu is quite stupid and can't be modified. Also mapping is out of the question.

The standard ecu WILL NOT LET YOU BOOST BEYOND 14PSI.
I write that in capitals, as people don't seem to listen when I tell them.

To get more than this figure, you will need:
A bigger turbo, as the standard T2 is tiny and already past it's efficiency range at 14psi.
Bigger injectors, something like 850 oranges maybe.
Better front mount intercooler and custom pipework.
VAG 710 recirc valves, the standard ones usually die once boost is raised to 14psi with either of the mods above.
Then, either some sort of piggyback ecu, or a derestricted ecu from EFI-parts.co.uk.

These mods would easily see 200bhp, WHEN SET UP PROPERLY.
Derestricted ecus are great, but dangerous if you don't know what you're doing, as all safety parameters have been removed.

If you do get 200bhp, great.
Next, start a countdown for how long your gearbox takes to dump it's guts all over the road.

Or, just buy an S40 T4. 200bhp out of the box.