Semiconductor sector-specific exchange traded funds climbed Monday as Taiwan Semiconductor Manufacturing (NYSE: TSM) led the charge, extending gains in the wake of Intel Corp (NasdaqGS: INTC) decision to outsource production of its next-generation chips.

On Monday, the iShares PHLX Semiconductor ETF (NasdaqGS: SOXX) advanced 2.8% and the VanEck Vectors Semiconductor ETF (SMH) increased 3.8%.

Meanwhile, Taiwan Semiconductor Manufacturing shares jumped 11.4%. TSM makes up 5.3% of SOXX underlying portfolio and 11.3% of SMH.

Leading the charge on Monday, TSMC shares rallied after U.S. chipmaker Intel stated it faced delays on its next-generation, 7-nanometer chips and will outsource their production. The U.S. chip giant’s management said during its second-quarter earnings call that it had made “contingency plans” and will use “somebody else’s foundry” to manufacture these semiconductors.

TSMC will be this so-called outside foundry as it has made chips that other companies designed. For instance, it provides chips for Apple (NasdaqGS: AAPL).

While Intel has not specifically named names, many anticipate Taiwan Semiconductor Manufacturing to be the main beneficiary.

“Chip outsourcing to foundries now its (Intel’s) contingency plan, which opens up a TAM (total addressable market) of approx. US$20bn to TSMC and puts more fuel to the advanced foundry market already running tight,” Szeho Ng, managing director of research at China Renaissance Securities, told CNBC, adding that TSMC “pretty much monopolizes the space” since the Taiwanese firm is among the sole producers of chips with the 7-nanometer process.

Samsung Electronics is another company that operates a foundry business with the potential to produce some of Intel’s 7-nanometer chips.

Monday’s boost in TSMC shares came after a report suggested Intel could place orders with the Taiwanese firm for 180,000 units of 6-nanometre chips for 2021.

Taiwanese stocks have also been resilient this year as the island nation largely avoided the negative economic impact of the coronavirus pandemic.

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