Chip ETF Recovers From Eight-Day Slide as TSMC and ASML Underline Sector Strength

The VanEck Semiconductor UCITS ETF climbed 2.1% yesterday, snapping a punishing stretch for chip stocks and offering investors a measure of relief after the Philadelphia Semiconductor Index had fallen for eight straight sessions. The rebound came as calmer conditions in the US Treasury market and softer crude prices combined to lift the sector's biggest names, according to media reports.

That recovery followed a cumulative decline of roughly 15.7% on the Philadelphia benchmark, a slide that had weighed heavily on semiconductor valuations. Yesterday's 1.6% gain for the index marked a turning point, with heavyweights held by the ETF — Nvidia, AMD and Broadcom among them — benefiting from the shift in sentiment. Each is closely tied to the artificial intelligence trade that has driven the sector's fortunes.

Results From the Industry's Giants

Fresh off the tape, Taiwan Semiconductor Manufacturing delivered a striking set of third-quarter figures last Thursday. The contract chipmaker posted a record net profit of 763.1 billion Taiwan dollars, up 69% year on year, on revenue of $46.72 billion — a 41.2% jump from the same period a year earlier. Management guided fourth-quarter revenue to a range of $52.3 billion to $54.3 billion, though executives struck a cautious note on 2027, pointing to lingering macroeconomic uncertainty.

Equipment supplier ASML added its own vote of confidence last Wednesday. Customer demand for its tools will outstrip available supply through 2028, the company said, with buyers already discussing orders for 2029 and 2030. ASML raised its 2026 revenue forecast to a range of €44 billion to €45 billion and guided fourth-quarter sales of €14.2 billion to €15.2 billion.

Rates and AI Financing Worries Weigh on Sentiment

Yet the strong operating numbers have not been enough to keep the ETF at its highs. Concerns over how the vast infrastructure buildout for artificial intelligence will be financed, together with expectations of higher interest rates, drove the recent selloff in chip stocks, according to media reports. The fund closed at €90.90 yesterday, still roughly 18% below the 52-week high of €111.18 touched at the end of June — a level that puts the ETF in correction territory even after the bounce.

The longer-term picture remains striking. Since the start of the year the fund has gained 71%, a performance that underscores how far the sector has outrun the broader market over 2025. Even so, the recent swings have laid bare how sensitive chip stocks are to moves in bond yields and to shifts in global economic data.

Institutions Buy the Dip

One signal of continued institutional appetite came from the fund's US-listed counterpart. Bloomberg reported last Thursday that more than $430 million flowed into that vehicle over just three trading days, suggesting some market participants are treating the pullback as an entry point while others remain wary of the volatility tied to an uncertain rate outlook.

The coming weeks will reveal whether the operational strength on display at TSMC and ASML can outweigh the macro concerns that have kept the fund well below its summer peak — or whether the sector's recent turbulence has further to run.