Chip orders were strong in both April and May this year, up from the fourth quarter of last year and first three months of 2009, said Ron Slaymaker, head of investor relations at TI, in a conference call. He noted that although TI's sales have increased, customers continue to reduce their chip inventories, albeit at a slower pace than during the fourth quarter of last year and the first quarter of this year.

"Long term growth will depend on end demand strengthening," he said.

The chip maker raised its second quarter revenue guidance to a range of US$2.3 billion to $2.5 billion, up from a prior range of $1.95 billion to $2.4 billion, and said it expects earnings per share to come in around $0.14 to $0.22, up from a previous range of $0.01 to $0.15.

"This is a pretty significant change to our guidance," Slaymaker said.

Asia is currently the biggest driver of growth for TI, while the U.S. and Europe continue to lag, he said, noting that laptops, mobile phones and communications infrastructure continued to be strong end markets for chips.

The company's stock rose 5.1 percent, or US$1.01, in after market trading on the New York Stock Exchange to $20.78.

Noting the guidance changes, investment banking firm Credit Suisse issued a report raising its price target on TI stock to $21 from a previous $12, but maintained a neutral rating on TI stock because its baseband business will continue to drag on results.

Market researcher iSuppli said that sustainable semiconductor growth will only come when the global economy recovers and consumers return to more normal purchasing patterns.