Exchange traded funds (ETFs) that invest in semiconductor stocks opened higher Wednesday after a deal for Varian Semiconductor Equipment (NasdaqGS: VSEA) that values the company at a 55% premium.

Varian is a holding in semiconductor ETFs such as PowerShares Dynamic Semiconductors (NYSEArca: PSI), which rallied 2% in early trading Wednesday.

Applied Materials (NasdaqGS: AMAT) on Wednesday said it will acquire Varian for $63 a share in cash, a 55% premium to Tuesday’s close, according to a press release.

“Varian is a great fit for our strategy to profitably grow share in our core semiconductor business with best-in-class technology and talent,” said Mike Splinter, chief executive of Applied.

Other ETFs for the sector include SPDR S&P Semiconductor (NYSEArca: XSD) and iShares PHLX SOX Semiconductor Sector Index Fund (NasdaqGM: SOXX).

“Varian Semiconductor has emerged as the leader in the ion implant segment of the chip equipment industry over the past several years,” said Morningstar analyst Andy Ng in a recent note on the company. “The firm presently benefits from healthy levels of demand for ion implant tools from chipmakers.”

PowerShares Dynamic Semiconductors

The opinions and forecasts expressed herein are solely those of John Spence, 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.