Applied Materials also projected higher-than-expected third-quarter profit on the back of strong demand for chips used in smartphones, notably from an ongoing shift to Organic LED displays, and solid-state drives, reports Rishika Sadam for Reuters.

“In the display area, customers are moving to OLED, particularly in mobile, and that increases our total available market by a factor of three,” Chief Executive Gary Dickerson told Reuters.

Related: Contrarian ETF Plays to Go Against the Grain

The improving sentiment may foreshadow strength ahead for the overall chip industry as Applied Materials is considered an industry bellwether and the company’s results are viewed as an indicator of health for the industry.

AMAT is among the top components in semiconductor sector-related ETFs, accounting for 4.8% of SMH’s underlying portfolio and 3.9% of SOXX.

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VanEck Vectors Semiconductor ETF