Semiconductors rise as STMicro, GlobalFoundries, Taiwan Semiconductor ease worries

Semiconductor stocks finished largely higher on Friday on reports that STMicroelectronics (NYSE:STM) $STMicroelectronics NV(STM)$and GlobalFoundries (NASDAQ:GFS)$GLOBALFOUNDRIES Inc.(GFS)$were set to announce plans next week to build a new chip factory in France and Taiwan Semiconductor (NYSE:TSM) $Taiwan Semiconductor Manufacturing(TSM)$Bullishreported strong monthly results.

Bloomberg, citing people familiar with the matter, noted that the new plant from STMicroelectronics (STM) and GlobalFoundries (GFS) will use government funds and will be the second project from the European Union’s Chips Act, a $43.8B plan to boost semiconductor production on the continent.

In March, Intel (INTC)$Intel(INTC)$ announced plans to expand its chip manufacturing in Europe over the next decade, including building an $18.6B mega fab in Magdeburg, Germany.

STMicroelectronics (STM) gained nearly 1.5% to $31.24, while GlobalFoundries (GFS) shares rose nearly 4.5% to $45.26.

The report comes on the same day that Taiwan Semiconductor (TSM) reported net revenue of ~NT$175.87B in June, up 18.5% year-over-year, easing investor concerns about the semiconductor industry.

Revenue for January through June 2022 totaled NT$1,025.22B, marking a 39.6% increase from prior year period.

Shares of Taiwan Semi (TSM), which competes with GlobalFoundries (GFS), finished up 1% to $81.51.

The positive news from STMicro (STM), GlobalFoundries (GFS) as well as Taiwan Semiconductor (TSM) have added to relief in recent days that the semiconductor industry is undergoing cyclical weakness.

Advanced Micro Devices (AMD) and Nvidia (NVDA) finished fractionally flat, while Marvell Technology (MRVL) and Qualcomm (QCOM) rose slightly more than 1%.

On Thursday, Samsung Electronics (OTC:SSNLF) estimated its April-June quarter resulted in its best profit since 2018, thanks in part to strong sales of memory chips to server customers.

Samsung (OTC:SSNLF) said it likely generated 77.78T won, or the equivalent of $59.8B, in revenue for the period, up 21% from a year ago and in line with expectations.

Samsung (OTC:SSNLF) estimated that generated an operating profit of 14T won, or $10.7B, up 11% on a year-over-year basis, but below estimates of 14.45T won.

The results come after Micron Technology (MU) recently offered weak guidance for its upcoming quarter, citing weakness in all of its businesses except for server DRAM memory chips.