A five-month rally in MediaTek looks set to extend as booming demand for smartphones and a promising new AI chip brighten the company’s outlook.

The Taiwanese tech firm’s stock has soared almost 40% since the end of June, outperforming a 2% advance in the Philadelphia Stock Exchange Semiconductor Index and a 7% rise in its U.S.-based rival Qualcomm. The gains have been fueled by robust appetite for mobile devices that utilize the company’s chips, especially in China.

The buzz surrounding MediaTek casts a spotlight on growing competition between semiconductor firms that are exploiting the use of AI to grab a larger share of the smartphone business. Investors see the Taiwanese firm’s Dimensity 9300 chip as a game-changer that will help it to steal a march over Qualcomm, the current leader in the high-end mobile market.