What happened

Shares of Axcelis Technologies (NASDAQ:ACLS) gained 21.7% in March 2017, according to data from S&P Global Market Intelligence.

So what

The maker of manufacturing equipment for semiconductor factories is largely following the medium-term trajectory of the industry-tracking PHLX Semiconductor index. Being a small-cap player in that large sector, Axcelis saw its share prices falling in early March only to whipsaw back to a strong gain on heavy trading volume.

Candlestick chart

Image source: Getty Images.

The chip industry has been crushing the wider market recently, and Axcelis naturally tapped into that broader sector gain.

ACLS Chart

ACLS data by YCharts.

Now what

The specific driver of March's market strength in the semiconductor industry can be pinned on Micron Technology (NASDAQ:MU). The memory chip maker reported strong second-quarter earnings on March 23, inspiring a plethora of analyst upgrades and a general surge across the chip sector.

Micron's report showed cloud computing systems driving a solid flow of memory chip orders, and that trend should translate into similar strength in other corners of the semiconductor industry. If semiconductor analysts and Micron's management are reading those tea leaves right, there should be several years' worth of impressive order volumes on tap for companies like Axcelis, which support the very foundation of the chip-building sector.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.