In spite of a dim outlook for the global chip market, the mood could barely have been better when Taiwan Semiconductor Manufacturing (TSMC) announced its second-quarter results yesterday.

TSMC, the world's largest contract chipmaker, predicted flat sales and a slight squeeze on margins in the current quarter. Nevertheless, many analysts are keeping their overweight or buy ratings on the stock. They argue that, if anyone can survive, grow and make money in this industry, it will be TSMC.