Intel Corp authorized another $10 billion to buy back its shares, which have been under pressure in recent months from concerns that the giant chipmaker is falling behind in the exploding mobile market.

Intel earned record profits last year and its gross margins are at record levels, but the company's shares have suffered recently as investors have focused more on tablets and smartphones than on PCs.

Intel said its increased share buyback authorization and its previously announced plan to increase dividends by 15 percent reflect confidence in its business outlook, but some investors also saw a strategy to push up the company's stock.

Clearly they had their best year in 2010 but still the stock has underperformed its peers. I can understand management being frustrated, said CLSA analyst Srini Pajjuri, who rates Intel's shares underperform.

Pajjuri said that with gross margins hitting a record 67.5 percent in the last quarter of 2010, some investors are concerned that they are more likely to decline than to improve further. Indeed, the company has forecast gross margins of around 64 percent for the current quarter.

Intel's processors are the brains in 80 percent of the world's PCs, but the company has yet to make its mark in the mobile gadgets that people increasingly use to surf the Web and update their social networking profiles.

On January 13 Intel posted better-than expected revenue and margins for the fourth quarter, but concerns about Intel's lack of success making mobile chips have hurt its stock.

The Philadelphia Semiconductor Index has surged around 32 percent over the past 12 months, but Intel's shares have gained only 5 percent in that time.

On Monday, shares of Intel were boosted by news of the increased buyback authorization, rising 1.5 percent to $21.13.

Today's announcement signals confidence in our fundamental business strategies both today and looking forward, Paul Otellini, Intel president and chief executive, said in a statement.

The chipmaker will pay a quarterly dividend of 18.12 cents per share and the extension of its share buyback funds increased the amount available for repurchases to $14.2 billion.

Major technology companies are expected to keep up sales and profit growth in 2011, but economic troubles in the United States and Europe could temper their results.

Chips designed with ARM Holdings Plc architecture dominate the tablet and smartphone market, while Intel's mobile chips so far have been seen by manufacturers as too power-hungry for devices that are left on for several hours at a time.

Intel plans to launch improved mobile chips this year to help it stake out market share in tablets, but the company is seen as far behind competitors like Qualcomm Inc and Nvidia Corp.

(Additional reporting by Jennifer Saba in New York, editing by Gerald E. McCormick)