Nov 2 (Reuters) - Qualcomm rose nearly 6% on Thursday as its strong first-quarter forecasts signaled that the two-year-long slump in the smartphone market was easing, led by a recovery in China.

The company, among the largest designers of chips used in smartphones, was set to increase its market value by nearly $7 billion based on its $117.09 premarket share price.

After four quarters of decline in its mainstay smartphone business, Qualcomm is starting to see an end to the inventory pile-up in the Android business, with fresh orders coming in for its chips.

Its revenue and profit projections for the last three months of the year were both above Wall Street estimates, with the company predicting a 35% quarter-on-quarter rise in sales to Chinese smartphone customers.

"While management ... still anticipate a less-than-normal seasonal uptick in December quarter, the guidance was better than anticipated with signs of inventory improving ahead of last quarter's expectations," Canaccord Genuity analysts said.

The company also allayed concerns about competition from Huawei and Samsung, both of which are now producing and using their own chips in devices after having relied on the U.S. company for the past several years.

CEO Cristiano Amon said Qualcomm expects to retain a "majority share" of the chips in Samsung's forthcoming S24 line of phones and does not expect Huawei's re-entry into the market to affect its relationship with Chinese smartphone companies.

"While some narrative headwinds (the use of in-house chips at Huawei and Samsung) still exist, we may find the market recovery/normalization off that trough may offset those eventualities," said Stacy Rasgon, analyst at Bernstein.

At least nine analysts lifted their ratings on Qualcomm's stock with an average rating of "buy", according to LSEG data. But the company also saw nine price target cuts on lingering fears about when the smartphone slump will actually end, pushing Wall Street's median view to $139.50.

The company's shares are little changed this year. They trade at nearly 12 times their 12-month forward earnings estimates, compared with investor darling Nvidia's 27.2. (Reporting by Samrhitha Arunasalam in Bengaluru; Editing by Shounak Dasgupta)