TI Shares Climb on Revised Guidance

Updated from 2:02 p.m. EDT

Shares of Texas Instruments(TXN Quote) surged Tuesday after the chipmaker raised its second-quarter guidance, hinting that the semiconductor industry may be poised for a turnaround.

The Dallas, Texas-based firm, which makes chips for cell phones and analog chips for gadgets such as headphones, raised both its revenue and profit estimates, pushing its share price upwards.

The company expects second-quarter sales between $2.3 billion and $2.5 billion, up from its prior estimate of $1.95 billion to $2.4 billion. Texas Instruments also expects profit of 14 cents to 22 cents a share, compared to its previous range between 1 cent and 15 cents a share.

Investors responded positively to the upgrade, which could bode well for the broader tech sector. The company's stock rose $1.47, or 7.4%, to $21.24 Tuesday, outpacing the modest advance in tech stocks that saw the Nasdaq rise 1%.

"This is a pretty significant change to our guidance -- as we have gone through the quarter, our manufacturing plan has changed to respond to this higher level of demand," said Texas Instruments Vice President Ron Slaymaker during a conference call late Monday.

Slaymaker added that the firm's wireless handset revenue is doing better than expected this quarter but acknowledged that this is not a major driver of Texas Instruments' growth.

"Of our major product lines, analog was by far the biggest driver of sequential growth this quarter, but all major product lines are growing," he said. "In addition, calculators should be up about $60 million this quarter."