SHARES in Wolfson Microelectronics jumped more than 5% after its components were selected for the Samsung Galaxy S III smartphone.
That added £12 million to the market capitalisation of the Edinburgh semiconductor and electronic chip maker which finished the day worth £233m as the stock jumped 10p to 200p.
The firm's ultra-low power chip, called the WM1811, from its audio hubs division will help to provide high-definition voice call quality plus audio for music and video on the Samsung device.
The S III is expected to be one of the main challengers to Apple's iPhone for the top spot in the global smartphone market.
The value of the agreement was not disclosed but the revenue has already been built into Wolfson's forecasts for 2012.
Nick James, analyst at Numis Securities, upgraded Wolfson to buy from hold and raised the 12-month price target from 190p to 250p.
In a note he said: "The strong performance so far of Galaxy S3 increases our conviction that consensus estimates are too low, as the ramp of WLF's silicon microphones could be promising too."
Mr James also estimated annual sales of $210m (£135m) which is above market consensus of around $175m.
Wolfson's chief executive Mike Hickey said: "We are delighted that Samsung has once again demonstrated its confidence in our Audio Hub solutions, this time by incorporating the WM1811 into its flagship Galaxy S III smartphone, the launch of which will further strengthen Samsung's position as a world leading smartphone manufacturer.
"Our continued success with Samsung, particularly within its range of smartphones and tablets, is testament to the unrivalled quality of our HD Audio Hubs, and the unique features in our products that allow manufacturers to create differentiated audio experiences."
Samsung is now one of Wolfson's biggest customers with the Scottish firm's products also in devices such as the Wave and Galaxy S.
The audio hubs division, which make chips giving high-definition audio for portable media devices, accounted for $21.3m of Wolfson's $30.3m first quarter sales.
Earlier this year Mr Hickey warned there was unlikely to be a bounce back in consumer confidence which would encourage a sales surge in electronic devices although he was comfortable with market expectations for Wolfson's full- year revenue to be around $175m.
Sales in the second quarter were predicted to be between $36m and $42m.
Samsung launched the S III, powered by Google's Android operating system, in May and recently announced it expected to ship around 10 million units by the end of July. That would make it the South Korean group's fastest-selling smartphone.
Barclays has predicted second-quarter shipments of the S III would be 6.5 million followed by 15 million in the third quarter.
Samsung, the biggest mobile phone maker in the world, said component shortages have been resolved and it is running at full tilt to meet demand for the S III.
"It is simply that demand far exceeded our expectation. But that doesn't mean we had set a very conservative demand forecast."
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