Taiwan Semiconductor’s (NYSE:TSM) stronger-than-expected results and guidance are positive for a number of areas in technology, including smartphones, artificial intelligence and automotive-related semiconductors, Bank of America said.
Revenue attributed to high performance compute growth was flat sequentially, compared to expectations of a 1% decline. Smartphones grew 19% sequentially, above consensus of 14%, though that figure was down 22% of the average seasonal growth. And with Taiwan Semiconductor saying there was no concern of pre-builds, that’s seen as positive for Skyworks Solutions (SWKS), Qorvo (QRVO) and Logitech (OTCQB:LOGN), Bank of America analysts said in a note to clients.
Additionally, growth for internet of things was “robust,” at 20% sequentially, a touch below the 21% estimate. And while Digital Consumer Electronics declined 20% sequentially, it was still better than the 31% decline that analysts were estimating.
Bank of America analysts also noted that Taiwan Semi is working to increase chip-on-a-wafer substrate capacity in 2026, referring to capacity as still “tight.” That bodes well for Nvidia (NVDA), AMD (AMD) and Broadcom (AVGO), Bank of America analysts added.
Lastly, automotive sales exceeded expectations, up 18% sequentially, well above the 7% estimate. That’s seen as a positive for NXP Semiconductors (NXPI) and STMicroelectronics (STM), the investment firm’s analysts explained.
“Auto grew above seasonal in 2Q/3Q, surprising given [the] weak Auto backdrop,” the analysts wrote. “We suspect a raise in wafer pricing inflated sales in 3Q and explains recent pick-up in Auto MCU ASP.”