(Reuters) - Intel Corp (INTC.O) raised its dividend by 16 percent for the third quarter, its second increase in six months, as the world's largest chipmaker expects robust demand for computers in 2011, sending its shares up 2 percent.

The company declared a cash dividend of 21 cents, up from its earlier dividend of 18.1 cents. Intel had earlier raised its dividend by 15 percent last November.

For 2011, Intel will pay a little over $4 billion as dividend, higher than the $3.5 billion the company paid in 2010.

The company has $22.8 billion in current assets, of which $4.19 billion is in cash and cash equivalents, according to a regulatory filing on April 2.

"Worldwide demand for computing continues to increase at a very rapid rate, putting Intel on track for revenue growth of over 20 percent this year," Chief Executive Paul Otellini said in a statement.

Intel posted first-quarter results ahead of Wall Street expectations and forecast second-quarter revenue growth that defied fears that the company was struggling to find its footing as personal computer sales growth wanes.

In March, peer Qualcomm Inc (QCOM.O) raised its quarterly dividend by 13 percent.

Shares of the company were up 47 cents at $23.50 on Wednesday morning on Nasdaq. The shares have gained about 14 percent of their value in the last one month.

(Reporting by Supantha Mukherjee in Bangalore; Editing by Sriraj Kalluvila)

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