Semiconductor exchange traded funds (ETFs) have taken a beating along with the overall market downturn, but brighter days appear to be ahead.

Yesterday, Intel’s second-quarter profit jumped 25% on demand for laptop chips. The numbers handily beat Wall Street’s estimates, reports Jordan Robertson for the Associated Press. Intel (INTC) is the world’s largest supplier of microprocessors – the brains of personal computers.

Intel is getting help from the rising demand for laptop computers around the world, along with the processors that keep them running. Analysts feared that the company was going to be dinged by the U.S. economy.

That illustrates the point Billy Fisher for the Street makes in a recent article: the sector is reliant on consumers.

The industry had been feeling the effects of a global oversupply in the market for memory chips, and the Semiconductor Industry Association estimates that memory makes up only 20% of total semiconductor sales and says that otherwise, the industry is sound.

One technical strategist expressed optimism that the sector can deliver a market-beating performance in the second half of the year.

If Intel’s numbers are an indication, it doesn’t seem out of the question.

Among the semiconductor-centered ETFs that could benefit:

  • PowerShares Dynamic Semiconductors (PSI): down 13.4% year-to-date; Intel is 4.9%
  • Semiconductor HOLDRs (SMH): down 12.7% year-to-date; Intel is 21.4%
  • SPDR S&P Semiconductor (XSD): down 16% year-to-date

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.