The Best Semiconductor ETF to Buy With $1,000 Right Now - The Globe and Mail

This article analyzes the current top semiconductor ETF investment option, highlighting the VanEck Semiconductor ETF (SMH). The fund tracks the MVIS U.S. Listed Semiconductor 25 index, focusing on the... Read original →

SMH’s outperformance stems from the AI infrastructure arms race, not luck. The concentration of 3nm and EUV capabilities at foundries like TSMC (Taiwan, China) creates a tight feedback loop: leading-edge process nodes enable NVIDIA and AMD chips, which in turn drive cloud capex from Microsoft, Amazon, and Meta. Yet this concentration heightens geopolitical exposure—U.S. CHIPS Act subsidies boost domestic capacity but can’t replicate East Asia’s ecosystem quickly, raising compliance costs. Competing ETFs like SOXX may pivot toward equipment and materials for differentiation. Over the next 12–24 months, as AI server demand potentially plateaus, investor focus will shift from raw compute to power efficiency and customization. SMIC and Samsung could leverage chiplet and heterogeneous integration to gain share, forcing ETF strategies to evolve from pure megacap bets toward supply chain resilience.