I just noticed something interesting in the semiconductor sector. It turns out that Microchip recently raised its earnings guidance, and this has generated a quite positive reaction in European markets. Infineon rose nearly 4%, and STMicroelectronics also performed well with gains close to 2.5% in Milan and Paris.

What’s happening here is quite revealing. According to Citibank analysis, chip supply has been normalizing over the past few months, but the interesting part is that Microchip’s reported demand remains robust, even above the historical average. That is exactly the signal the European market has been waiting for.

For European companies in the sector, this opens doors. If the trend shown by Microchip holds, the upcoming quarterly reports from Infineon and STMicroelectronics could surprise to the upside. Analysts see real potential for them to beat expectations and improve their outlooks.

In summary, what we’re seeing is a shift in the narrative of the semiconductor sector. From scarcity to supply normalization with still-strong demand. For investors in European companies in the field, this translates into opportunities. It’s worth paying attention to how this evolves in the coming months.