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Chip Manufacturing King Sets Tone For Semiconductor Earnings Season

Daniel Laboe
·2 mins read

The semiconductor sector has been on fire in 2020. The pandemic forced rapid digitalization into every corner of the economy, as the world adapts to the "stay at home" initiative. The robust digital tailwind boosted the stocks that make up the backbone of technology, aka digital chips.

iShares semiconductor tracking ETF SOXX, whose top holdings include chip giants like Broadcom AVGO, Texas Instruments TXN, Qualcomm QCOM, Nvidia NVDA, and Intel INTC, has driven more than 28% returns for investors since the beginning of the year. This represents an alpha of more than 20% above the broader S&P 500 index.

Earnings to Watch 

Now the chip sector's outsized returns will be put to the test as Q3 earnings commence. We have an exciting line up of first-class semiconductor businesses releasing earnings over the next week. Below is a timeline of key chip earnings to focus on.


The largest and most connected semiconductor giant, TSMC, set the chip market earning tune this morning to an incredibly positive note. The company illustrated record financials on both their top and bottom-lines, driving over $12.5 billion in sales (29% growth year-over-year).

The chip market is exploding as 5G technology hits the fan, as well as the next generation of high-performance chips (HPC) hitting the market. You can see this with TSMC’s biggest driver segments, Smartphone, HPC, and internet of things (IoT), all experiencing big boosts this past quarter.

TSMC has also unleashed 5nm transistor technology into the commercial market with Apple’s AAPL newly debuted 5G iPhone 12 utilizing this innovation, likely being TSMC’s largest purchaser of this technology. TSMC will benefit from the swelling demand for the newest iPhones, iPads, and MacBooks in the years to come.

For more color on TSMC and two other chip leaders, check out my recent articles: 3 Chip Stocks That Are Changing The World

Cadence Design Systems CDNS

Cadence and its chip design duopoly partner Synopsys SNPS have boomed in 2020 thus far, nearly perfectly tracking each other and driving returns of 61% and 58%, respectively. You can see both of their relative performance below.

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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Intel Corporation (INTC) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Lam Research Corporation (LRCX) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
Ericsson (ERIC) : Free Stock Analysis Report
Xilinx, Inc. (XLNX) : Free Stock Analysis Report
Synopsys, Inc. (SNPS) : Free Stock Analysis Report
Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report
Southern Company The (SO) : Free Stock Analysis Report
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