A Texas Instruments desk is shown in San Diego, California, U.S., April 24, 2018. REUTERS/Mike Blake

Jan 25 (Reuters) – Texas Instruments Inc (TXN.O) on Tuesday forecast better-than-expected revenue for the current quarter and said it would focus more on chips used in lucrative parts of the world. automotive and industrials, pushing its shares up 4% in extended trade.

The company, which also beat fourth-quarter revenue estimates, is ramping up capacity as chipmakers try to bridge the demand-supply gap caused by pandemic-fueled supply delays and the transition to work and learning from home.

Texas Instruments now plans to capitalize on opportunities and place “additional strategic focus” on the industrial and automotive segments, which account for about 41% and 21% of the company’s annual revenue.

“It’s very easy to see in the automotive market that there’s content growth. We can see that cars today simply have more semi-content per vehicle than what we were driving 5 and 10 years. And it’s very clear that’s going to continue,” TI head of investor relations David Pahl said in a call with analysts.

Customers in these two segments are turning to analog and embedded technology to make their end products smarter and more efficient, which will lead to faster growth in demand for chips in these segments, he added.

The company announced plans in November to set up 300-millimeter wafer fabs in Sherman, Texas, to complement its two other units in the city and a third it purchased in Utah.

Texas Instruments is forecasting first-quarter revenue of $4.5 billion to $4.9 billion, versus $4.37 billion for analysts, according to IBES data from Refinitiv.

The company manufactures analog and embedded processing chips that are used in products for a broad market, reducing its reliance on a single customer segment.

Fourth-quarter revenue rose 19% to $4.83 billion, beating estimates of $4.43 billion.

Net income of $2.27 per share also beat expectations of $1.94.

Reporting by Yuvraj Malik, Tiyashi Datta and Amruta Khandekar in Bengaluru; Editing by Vinay Dwivedi and Sriraj Kalluvila

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