Qualcomm has released its new forecast for the current quarter, predicting that China will have the strongest demand for its mobile chips.

The world's largest chip maker also expects to sign more licensing deals with the Chinese government as the company gets a majority of its profit from patent licensing.

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The company is extending its reach into China, the world’s largest smartphone market, which translates into heftier royalty payments. In the chipset business, Chinese handset makers and Samsung have gained share against Apple, helping boost demand for Qualcomm’s processors and modems. China also provides the company with the biggest slice of its revenue, Bloomberg reported.

“It was a really strong quarter -- it was strong in both businesses, in particular, the license business. We got some money a little earlier than we would have thought. In China, the chipset business has done a good job of growing. We’re on track and executing,” Chief Executive Officer Steve Mollenkopf said.

The company's revenue increased to $6.04 billion in the quarter that ended on June 26 from $5.83 billion a year earlier. Excluding items, Qualcomm earned $1.16 cents per share, compared with analysts’ estimate of 97 cents. During the quarter, the company returned $781 million to shareholders in the form of dividends and $100 million in share repurchases. Its quarterly dividend was $0.53 per share.

Qualcomm said that it is expecting a fiscal year revenue from its high-margin licensing business that would be between $7.4 billion and $7.8 billion.

Its next big bet is the fast next-generation 5G technology, a wireless service that is expected to be 100 times faster than the current 4G networks, Reuters reported. The company said it now expects to gain traction in the 5G technology by 2018-2019.

TagsQualcomm, china, Qualcomm forecast, chipmaker, mobile chips, Smartphone