Unexpectedly good results for Intel's third quarter combined with ASML turning in a profit for its third quarter is bound to bring some hope that the semiconductor industry is on the turn.
ASML, a Dutch semiconductor equipment manufacturer, turned in a net profit of $29.3 million for its third financial period - it turned in three previous quarters of losses. Although its profit is down 73 percent from the same period a year back, its profitability demonstrates that investment in capital equipment is showing signs of a resurgence.
ASML makes lithography equipment used by large companies in their fabs and numbers Samsung, TSMC and Intel as its customers.
Intel's profit was also down from the same period a year ago, but its results are far better than it and the financial analysts had expected. If Intel sells more CPUs it means, of course, that its customers such as HP, Dell, and a plethora of other companies have regained some badly needed confidence.
In after hours trading on NASDAQ, Intel's share price rose by over four percent to stand at $21.39 at press time.
And it's not just the semiconductor industry that's showing signs of increased activity. Cisco spent $2.9 billion yesterday to pick up Starent Networks - mergers and acquisitions (M&A) are also a sign of increased confidence. While it's clear that this route is a cheaper way to move into technology than research and development (R&D), the Cisco acquisition underlines the fact that investment of one sort or another means the return of optimistic sentiment.
Barring a meteor destroying the planet or some other type of global disaster, it's clear that semiconductors and the internet are not going to go away.
Intel's results also indicate that associated markets, such as peripherals, DRAM, hard drives, monitors and the rest are also likely beneficiaries of an improved tech market.
It's too soon to say that everything is rosy in the tech garden, but the results from Intel and ASML are encouraging.