(RTTNews) - Programmable chip maker Xilinx Inc. (XLNX: News ) on Wednesday raised its forecast for second-quarter sales, citing a significant increase in sales of Virtex-5 chips and broad based strength across nearly all end markets and geographies. The company also said it expects to ship the majority of the previous quarter's delinquencies in the second quarter. Shares of the company are up more than 6% in the regular trading session.

Xilinx, which designs logic chips that are programmed to perform specific chores in products, now forecasts sales for the second quarter to increase 10% sequentially. Earlier, the company had forecast sales for the quarter to be up 2%-6% sequentially.

The company had reported revenues of $376.2 million for the preceding first quarter in July. A 10% increase sequentially implies revenues of $413.82 million for the second quarter. On average, seventeen analysts polled by Thomson Reuters expect the company to report revenues of $391.61 million for the second quarter.

The San Jose, California-based company said it expects Virtex-5 sales to surpass 20% of total sales for the second quarter. The Virtex-5 line comprises of programmable chips for high-speed networking applications. The company's chips are used in network routers, cellphone base stations, cable modems and DVD routers. Approximately 40% of the company's business is generated from the communications market, while about 30% stems from the industrial segment.

Xilinx however maintained its outlook for gross margin for the second quarter of approximately 61% and operating expenses of about $175 million, including $5 million in restructuring charges. The company is slated to report its financial results for the second quarter on October 14.
In mid-July, Xilinx reported a 56% plunge in profit for the first quarter from the year-ago period, hurt by sales decline in all geographies and end markets. The company's net income for the quarter dropped to $38.0 million, or $0.14 per share, from $86.3 million, or $0.31 per share, in the same period a year ago. Sales for the quarter declined 23% to $376.2 million from $488.2 million in the year-ago period, impacted by supply constraints primarily relating to certain Virtex-5 devices in high demand.

The company had reported a double-digit decline in net revenue from all geographies, and by end market. Except for a 60% growth in revenue from new products, all other product revenues dropped by more than 25%.

Chip makers have suffered as the economic downturn dried up demand for personal computers, mobile phones and other electronics over the last year. However, the market is currently experiencing a slight improvement in demand. Several chip makers have recently raised their sales outlook, signaling a broad recovery in the chip business.

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