By Sinead Carew

NEW YORK (Reuters) - Microchip maker Texas Instruments Inc <TXN.N> said on Monday mobile phone chip demand was a little better than anticipated, relieving investors and sending its shares up more than 6 percent, as it increased expectations for fourth-quarter revenue and earnings.

TI expects sequential growth in demand for chips for advanced phones with high-speed Web links, and set earnings and revenue target ranges with midpoints above those of its previous forecast and average Wall Street estimates.

Some investors had feared TI would reduce targets after an already-disappointing initial outlook issued in October and amid widespread concerns the economy would weaken and consumer spending fade, according to analysts.

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TI forecast earnings per share of 50 cents to 54 cents per share, on revenue of $3.50 billion to $3.66 billion, up from its October 22 forecast for earnings per share of 48 cents to 54 cents per share on revenue of $3.40 billion to $3.68 billion.

Analysts on average had expected earnings of 50 cents per share on revenue of $3.56 billion, according to Reuters Estimates.

While investors were relieved TI's outlook had improved, ThinkEquity Research analyst Robert Burleson said they would be anxious for signs of improvements in the first quarter.

"It's a bit of a positive surprise," he said. "It's still a disappointing quarter. People will be looking for any insights they can get on order trends."

TI told investors on a conference call that wireless chip demand was a little better than it had expected in October, but it would still be slower than a typical fourth quarter for TI as it loses some business to rivals at Ericsson <ERIC3.SA>.

"Wireless is probably doing a little better than we expected," Ron Slaymaker, TI Vice President said on a call with analysts. "We now see the levels we experienced in October and November sustaining through the month of December."

TI disappointed investors in October when it targeted revenue from wireless chips at the same level as the third quarter amid a loss of some business at Ericsson.

TI said it expected semiconductor revenue between $3.43 billion and $3.57 billion compared with its previous view of $3.33 billion to $3.59 billion.

It backed its earlier view for calculator revenue of $70 million to $90 million.

Some analysts had also expressed concern the company could be affected by cautious spending due to economic concerns among customers of its analog chips, which are used in everything from industrial equipment to consumer electronics.

The company's shares rose 6.4 percent to $34.75 in late trading.

(Reporting by Sinead Carew; Editing by Andre Grenon)