NEW YORK ( TheStreet) -- Xilinx ( XLNX) raised its sales target for the December quarter, citing strong demand.

With three weeks left in the quarter, the chipmaker expects sales to be about $490, or up 18% sequentially over the prior quarter. Previous guidance called for an 8% sequential gain. Analysts were looking for sales of $455 million or a 10% sequential growth rate.

Xilinx says gross margins for the December quarter widened to 64%, which is above the 62% to 63% range the company originally anticipated.

The improved outlook for the programmable chip giant comes just five months after Xilinx warned of a sales shortfall in the June quarter. The news is likely to give chip peers like Altera ( ALTR) and QuickLogic ( QUIK) a slight boost.

Xilinx shares were up 1% to $23.50 in pre-market trading Tuesday.

--Reported by Scott Moritz in New York