Semiconductors – Tiny chips, big bucks

Semiconductors are the ubiquitous technology behind all of the technology we use in our daily lives and AI services will continue to accelerate their demand. Companies like Nvidia, AMD, Texas Instruments and Broadcom are beneficiaries of this trend. Here is how you can invest in them with one ETF.

FSMOne.com
FSMOne.com27 Aug 2024 26980 Views
Semiconductors – Tiny chips, big bucks

Semiconductors are at the heart of every electronic device today. They enable our technology, from smartphones, to laptops, cars, medical devices and most recently of all, artificial intelligence (AI) systems. Semiconductors are an essential component in these technologies.

With the world becoming increasingly tech-driven, chip demand continues to grow and we expect the semiconductor industry to be one of the best-performing industries over the next decade.

So far in 2024, chip sales have risen by 18.9% year-on-year and look to be on track to deliver double digit sales growth over the next few quarters. NVIDIA saw its revenue more than double in FY2024 as demand for AI chips surged. Cloud service providers (e.g. Microsoft, Amazon and Google) have snapped up much of these chips as they continue to integrate AI solutions into their products. The trio also managed to surpass growth expectations in their latest earnings results. Microsoft in particular, said that revenue for its cloud services climbed 31% in 1Q24, and nearly a quarter of that growth is attributable to AI services.

One of the best ways to gain exposure to the semiconductor sector is through the VanEck Semiconductor ETF (SMH). This ETFs track the performance of the semiconductor industry as a whole, providing investors with a convenient and cost-effective way to invest in this rapidly growing sector.


The VanEck Semiconductor ETF (SMH) has exhibited impressive recent performance and with the semiconductor sector’s robust growth outlook, you can invest in what we believe will be one of the best-performing sectors over the next decade. Here is a look at the Top 10 companies you invest into via this ETF.

The VanEck Semiconductor ETF




*Returns as at 21 Aug 2024

Other Funds to consider

In addition to the VanEck Semiconductor ETF, investors who are seeking to invest in the broader Technology sector can consider these stand-out Technology sector Funds, which have exhibited strong returns over the past few years. Click on the “Fund Review” tab in their respective Fund Factsheets to discover how these fund managers help you select the best stocks in the Technology sector!


Unit Trust

Fund Currency

YTD Returns*

3-year Annualised Returns

5-year Annualised Returns

Eastspring Investments – Global Technology Fund

SGD

26.99%

7.32%

16.78%

Fidelity Global Technology Fund

USD

13.44%

7.93%

19.64%

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