Still, Broadcom reiterated its revenue forecast yesterday, encouraging investors who had said that target might be overly optimistic after other chipmakers had warned of disappointing results, Burton said.

Broadcom, based in Irvine, California, made the comments in its announcement of its purchase of NetLogic Microsystems Inc., a maker of processors used in data networks, for about $3.7 billion in cash.

The positive reports from Taiwan Semiconductor and Broadcom diverge from others in the chip business. In addition to Altera and Texas Instruments, Fairchild Semiconductor International Inc. told investors its results would be less than earlier forecast.

"Taiwan Semiconductor's data sticks out like a sore thumb," Davenport said in an interview. "We are seeing cuts on almost a daily basis."

Apple, whose sales jumped 52 percent last year, is Broadcom's largest customer, accounting for about 11 percent of sales, according to data compiled by Bloomberg. Apple's biggest suppliers include Hon Hai Precision Industry Co., Samsung Electronics Co. and Quanta Computer Inc., according to Bloomberg data.

Eoin Treacy's view The market for handheld devices is creating considerable demand growth for chips. I reviewed Intel yesterday and there is a relatively high degree of commonality across the sector.

Broadcom has returned to the area of the 200-day MA and has firmed in the region of $30. A sustained move below that level would be required to question current scope for some additional upside.

Qualcomm pulled back rather sharply in August but has since bounced impressively. A sustained move below $45 would be required to question potential for some additional upside. Taiwan Semiconductor has a relatively similar pattern.

Texas Instruments had a deeper correction but has also found at least short-term support and appears to be unwinding the oversold condition relative to the 200-day MA. STMicorelectronics rallied impressively from the €4 this week and a sustained move below that level would be requited to question current scope for additional upside.

MediaTek has rallied to challenge the yearlong progression of lower rally highs. A sustained move above TWD325 would suggest demand is returning to medium-term dominance.