4 ETFs To Invest In Shining Semiconductor Stocks

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Semiconductor ETFs continue to outperform the broader market thanks to surging demand for chips from manufacturers of everything from smartphones to cars, laptops, PCs, video games, and data centers. Chips have become integral in anything powered by software.

Many advanced chips are designed in the US, but only around 12% are manufactured here. Taiwanese chipmaker TSMC (TSM Quick Quote TSM - Free Report), the world’s largest and most advanced contract chip manufacturer, announced recently that it was increasing capital investments by at least 47% this year to meet surging demand.

Tech giants such as Apple (AAPL Quick Quote AAPL - Free Report) and Amazon (AMZN Quick Quote AMZN - Free Report) are now designing some of their chips in-house, but they still have rely on Asian manufacturers. We have also seen an acceleration in the industry consolidation, with Nvidia’s (NVDA Quick Quote NVDA - Free Report) plan to acquire chip designer Arm and AMD’s (AMD Quick Quote AMD - Free Report) deal with Xilinx (XLNX).

The iShares PHLX Semiconductor ETF (SOXX Quick Quote SOXX - Free Report) is a modified market cap-weighted ETF. It has 30 holdings with a cap of 8% on individual securities. Intel (INTC Quick Quote INTC - Free Report) and Broadcom (AVGO Quick Quote AVGO - Free Report) are its top holdings.

The VanEck Vectors Semiconductor ETF (SMH Quick Quote SMH - Free Report) also follows a market-cap-weighted index.  Taiwan Semi and Nvidia are its top holdings.

The SPDR S&P Semiconductor ETF (XSD Quick Quote XSD - Free Report) is an equal-weighted ETF.  The Invesco Dynamic Semiconductors Portfolio (PSI Quick Quote PSI - Free Report) is a Smart Beta ETF.

Please watch the short video above to learn more about these ETFs.

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