Qualcomm Inc. increased its dividend by 40 percent and set up a $5 billion share buyback plan, rewarding investors after rising demand for smartphones that run on its technology spurred sales growth.

The quarterly cash dividend will increase to 35 cents from 25 cents, Qualcomm, the largest seller of semiconductors for mobile phones, said in a statement Tuesday. The new share repurchase plan replaces an older $4 billion plan that had $2.5 billion remaining.

Since 2003, Qualcomm has returned $19.9 billion to investors through a combination of stock repurchases and cash dividends. The majority of Qualcomm’s revenue comes from baseband chips, which connect phones to cellular networks, sold to wireless-device makers such as Apple Inc., HTC Corp. and Samsung Electronics Co. Most of the company’s profit comes from the licensing of so-called code division multiple access technology, a radio-communications standard used in other chips, handsets and phone systems.

“Our business model continues to generate strong operating cash flows that enable us to invest in and execute on our strategic priorities, while also returning capital to stockholders,” Chairman and Chief executive Officer Paul E. Jacobs said in the statement. 

The stock jumped 2.4 percent to $68.25 at 7:45 a.m. New York time in early trading.