The VanEck Semiconductor ETF (SMH) is one of the most focused ways for investors to bet on the backbone of modern technology: semiconductors. With a portfolio concentrated in 25 holdings, SMH offers a high-conviction approach to chips, giving outsized weight to the companies driving AI, cloud computing, and electronics manufacturing worldwide. Year-to-date, SMH has surged more than 31%, highlighting just how critical this sector has become in powering everything from smartphones to data centers.
| Rank | Ticker | Company | % of Fund |
|---|---|---|---|
| 1 | NVDA | NVIDIA Corp | 18.59% |
| 2 | TSM | Taiwan Semiconductor Manufacturing Co | 10.04% |
| 3 | AVGO | Broadcom Inc | 8.55% |
| 4 | ASML | ASML Holding NV | 5.56% |
| 5 | AMAT | Applied Materials Inc | 5.17% |
| 6 | LRCX | Lam Research Corp | 5.01% |
| 7 | INTC | Intel Corp | 4.98% |
| 8 | MU | Micron Technology Inc | 4.84% |
| 9 | KLAC | KLA Corp | 4.76% |
| 10 | AMD | Advanced Micro Devices Inc | 4.70% |
| 11 | QCOM | Qualcomm Inc | 4.58% |
| 12 | TXN | Texas Instruments Inc | 4.20% |
| 13 | ADI | Analog Devices Inc | 4.18% |
| 14 | CDNS | Cadence Design Systems Inc | 3.20% |
| 15 | SNPS | Synopsys Inc | 2.93% |
| 16 | MRVL | Marvell Technology Inc | 2.04% |
| 17 | NXPI | NXP Semiconductors NV | 1.53% |
| 18 | MPWR | Monolithic Power Systems Inc | 1.27% |
| 19 | MCHP | Microchip Technology Inc | 1.07% |
| 20 | STM | STMicroelectronics NV | 0.79% |
| 21 | TER | Teradyne Inc | 0.68% |
| 22 | ON | On Semiconductor Corp | 0.50% |
| 23 | SWKS | Skyworks Solutions Inc | 0.30% |
| 24 | QRVO | Qorvo Inc | 0.23% |
| 25 | OLED | Universal Display Corp | 0.20% |
Investors are drawn to SMH for its purity of exposure. Unlike broader technology ETFs, SMH focuses heavily on companies designing, manufacturing, and supplying the chips that underpin every digital device and service. This concentration comes with higher volatility, but also greater upside when chip demand is booming. With companies like NVIDIA, TSMC, and Broadcom leading the charge, SMH provides a direct window into the cutting edge of hardware innovation.
What makes SMH unique is how much just a few names drive its performance. NVIDIA alone accounts for nearly one-fifth of the fund, while the top three holdings represent over 37% of total assets. In this article, we’ll break down the top holdings and take a closer look at NVIDIA, TSMC, and Broadcom, the trio that defines both the ETF’s trajectory and the future of the semiconductor industry.
1. NVIDIA (NVDA)
NVIDIA is the undisputed leader in AI computing, and its weight in SMH reflects just how central the company has become to the entire semiconductor landscape. Its GPUs dominate the training of large AI models, and the new Blackwell architecture has raised the bar again with performance and energy efficiency. NVIDIA is no longer just a chipmaker; it’s a full-stack AI platform, offering CUDA software, AI frameworks, and networking gear that make its systems sticky with customers.
Its DGX Cloud rollout adds a recurring revenue dimension, giving enterprises on-demand access to GPU clusters. Partnerships with cloud providers like Oracle, Microsoft, and Google ensure that NVIDIA’s chips aren’t just powering on-premises servers, but are also embedded into the backbone of cloud AI infrastructure. By blending hardware, software, and services, NVIDIA has created a vertically integrated business that continues to expand its moat.
For SMH, NVIDIA is both the growth engine and the risk factor. At nearly one-fifth of the fund, its quarterly earnings and guidance can swing SMH’s returns. As long as demand for AI compute accelerates, NVIDIA’s role will remain unmatched, making SMH one of the purest plays on AI-driven growth in the market.
2. Taiwan Semiconductor Manufacturing Company (TSM)
TSM is the world’s largest and most advanced semiconductor foundry, responsible for producing chips for companies such as NVIDIA, Apple, AMD, and many others. Its technological lead at the 3nm and 2nm nodes gives it unmatched importance in the supply chain, and its economies of scale enable it to manufacture at levels that competitors cannot match. Essentially, without TSM, much of modern tech doesn’t happen.
Geopolitical risk is inherent to Taiwan’s complex relationship with China. But even with that overhang, global chipmakers have no choice but to rely on TSM’s capabilities. The company continues to expand abroad, with new fabs in Arizona and Japan aimed at diversifying its footprint and reducing supply chain vulnerabilities. These moves are critical as governments push to reshore semiconductor capacity.
In SMH, TSM is the second-largest holding, and for good reason, it’s the backbone of the industry. While it doesn’t have the brand recognition of NVIDIA or Intel, every breakthrough in AI, smartphones, and high-performance computing has TSM at its foundation. Its weight ensures that SMH investors gain exposure to both leading-edge chip design and global manufacturing scale.
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3. Broadcom (AVGO)
Broadcom has emerged as a dual threat in the semiconductor space, being both a leader in networking silicon and a major supplier of custom chips for hyperscale data centers. Its Tomahawk 5 and Jericho networking products enable massive GPU clusters to communicate efficiently, eliminating bottlenecks that often limit AI training performance. At the same time, Broadcom’s ASIC business has won large-scale orders from cloud giants, making it a go-to partner for those looking to optimize cost and energy efficiency.
The company isn’t just about chips, it’s also a software powerhouse. With VMware now under its umbrella, Broadcom adds a recurring revenue layer from enterprise software, creating a more balanced business model. That diversification helps smooth out the cyclicality inherent in semiconductors, making it a steadier performer even when chip demand fluctuates.
For SMH investors, Broadcom is a critical piece of the puzzle. Its exposure to both the hardware and software sides of the AI boom ensures it benefits from multiple growth vectors. At nearly 9% of the ETF, Broadcom provides balance alongside NVIDIA’s high growth and TSMC’s manufacturing dominance, making the top three holdings a powerful trio within the fund.
What SMH Really Owns
SMH is not a “set it and forget it” broad tech ETF, it’s a concentrated bet on the semiconductor sector. The top 25 holdings drive the bulk of the fund’s performance, with NVIDIA, TSMC, and Broadcom alone accounting for over 37% of the fund’s assets. That concentration creates both upside potential and risk, depending on how these giants perform.
At the same time, SMH offers exposure across the semiconductor value chain, from designers (NVIDIA, AMD) to manufacturers (TSMC, Intel) to equipment makers (ASML, Applied Materials). For investors seeking targeted exposure to the chip sector, it’s one of the most direct vehicles available in the market today.
Key Insights
- High concentration in AI leaders. Nearly 19% in NVIDIA alone, with over a third of the fund in the top three names.
- Balanced across the value chain. Includes foundries, designers, and equipment makers, giving broad semiconductor exposure.
- Volatility is the trade-off. Semiconductors are cyclical, and while AI demand is strong now, downturns in chip spending can make SMH more volatile than broader tech ETFs.
Why SMH Is Right For Semiconductor Investments
The VanEck Semiconductor ETF (SMH) is about as close as investors can get to a pure play on the global chip industry. With NVIDIA, TSMC, and Broadcom at the helm, the ETF reflects the companies setting the pace for AI, high-performance computing, and data center infrastructure. Its concentrated nature means performance is often amplified, both on the upside and downside.
For investors bullish on semiconductors and the long-term rise of AI, SMH is a compelling option. It delivers exposure to the industry’s leaders while still offering diversification across 25 holdings. Just know that “owning semis” through SMH is not the same as broad tech, it’s a sharper, more cyclical, and more growth-driven bet.
Ultimately, SMH highlights the reality of modern markets: a handful of semiconductor companies are powering the digital world. If you believe demand for chips will continue to grow, this ETF offers a straightforward way to capitalize on that trend.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
