(Bloomberg) -- German chipmaker Infineon Technologies AG raised its revenue forecasts for the quarter and the full year, citing stronger-than-expected demand for its automotive and industrial products. 

The company now sees second-quarter revenue at more than €4 billion ($4.3 billion), up from an earlier forecast of €3.9 billion and well above analysts’ estimates, it said in a statement on Tuesday. The company said full-year sales will also be “meaningfully above” its previous estimate of about €15.5 billion, plus or minus €500 million. 

Demand from the auto industry has buoyed earnings for chipmakers including Infineon and STMicroelectronics NV. Carmakers and industrial manufacturers are recovering from Covid 19-era shortages and the global uncertainties that were brought on by the war in Ukraine. 

“We had expected automotive and industrial trends to remain robust, but demand (and Infineon’s ability to deliver chips) is higher than anticipated and potentially the biggest driver of upside,” Citigroup Inc. analyst Andrew Gardiner said in a note to clients. 

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Infineon shares jumped 6.5% to €35.76 in Frankfurt at 9:16 a.m., the biggest intraday increase since February. The stock has gained 25% this year. 

The company may also be seeing less pressure than anticipated in its power sensing and solutions business — which makes semiconductors used in devices such as home appliances, power tools and lighting systems — with fewer charges related to underutilization and better margins, Gardiner said in the note. 

Infineon Chief Executive Officer Jochen Hanebeck had warned about declines in the PSS business in an analyst call in February. The company said at the time that weaker spending on consumer, computing and communications devices was contributing to declines. Infineon said it would work to keep inventory levels for some products lower, and expected to incur underutilization costs as a result. 

Between the increase in revenue, higher prices for its products and more favorable energy costs, Infineon said it expects margins to reach into the “high-twenties” percentage-wise in the second quarter. It had previously projected a margin around 25%. 

The company plans to issue a full set of financials for the second quarter during on May 4. 

--With assistance from Kit Rees and Subrat Patnaik.

(Updates with analyst comment starting in the fourth paragraph)

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