The VanEck Semiconductor ETF (SMH) has been one of 2025’s standout performers, returning 40.3% year-to-date as chipmakers power the global artificial intelligence revolution. From data centers to smartphones, semiconductors are the hidden infrastructure of the modern economy, and SMH offers pure exposure to that ecosystem, chip designers, foundries, and equipment manufacturers.
| Rank | Symbol | Company | % Weight |
|---|---|---|---|
| 1 | NVDA | NVIDIA Corporation | 18.85% |
| 2 | TSM | Taiwan Semiconductor Manufacturing Co. | 9.79% |
| 3 | AVGO | Broadcom Inc. | 8.09% |
| 4 | ASML | ASML Holding N.V. | 5.75% |
| 5 | INTC | Intel Corporation | 5.65% |
| 6 | LRCX | Lam Research Corporation | 5.45% |
| 7 | AMAT | Applied Materials, Inc. | 5.45% |
| 8 | MU | Micron Technology, Inc. | 5.23% |
| 9 | KLAC | KLA Corporation | 4.82% |
| 10 | AMD | Advanced Micro Devices, Inc. | 4.71% |
| 11 | QCOM | QUALCOMM Incorporated | 4.23% |
| 12 | TXN | Texas Instruments Inc. | 3.95% |
| 13 | ADI | Analog Devices, Inc. | 3.86% |
| 14 | CDNS | Cadence Design Systems, Inc. | 2.96% |
| 15 | SNPS | Synopsys, Inc. | 2.81% |
| 16 | MRVL | Marvell Technology, Inc. | 2.09% |
| 17 | NXPI | NXP Semiconductors N.V. | 1.45% |
| 18 | MPWR | Monolithic Power Systems, Inc. | 1.23% |
| 19 | MCHP | Microchip Technology Inc. | 1.02% |
| 20 | STM | STMicroelectronics N.V. | 0.75% |
| 21 | TER | Teradyne, Inc. | 0.70% |
| 22 | ON | ON Semiconductor Corp. | 0.46% |
| 23 | SWKS | Skyworks Solutions, Inc. | 0.27% |
| 24 | QRVO | Qorvo, Inc. | 0.22% |
| 25 | OLED | Universal Display Corp. | 0.19% |
SMH’s rise this year has been driven by unrelenting demand for AI, supply chain recovery, and record-level capital spending on advanced nodes. With companies like NVIDIA, TSMC, and Broadcom leading the charge, semiconductors have become the defining growth story of the decade. Investors seeking to capitalize on the hardware side of AI, rather than software, have increasingly turned to SMH as the go-to ETF for targeted exposure to this sector.
Unlike broader tech ETFs that blend hardware and software, SMH is laser-focused. It’s concentrated in fewer than 30 holdings, providing investors with meaningful exposure to the industry leaders shaping the next frontier of computing. With a 56% CAGR, it’s not just outperforming, it’s redefining what’s possible in thematic investing.
1. NVIDIA (NVDA)
NVIDIA dominates SMH with an 18.9% weighting, reflecting its central role in the global semiconductor ecosystem. The company’s GPUs are the gold standard for AI training and high-performance computing. As demand for AI infrastructure skyrockets, NVIDIA’s data-center division continues to post record results, solidifying its position as the backbone of the AI economy.
In 2025, NVIDIA’s new Blackwell architecture is expected to extend its performance lead, helping the company maintain dominance over competitors like AMD and Intel. Its CUDA software platform further locks customers into its ecosystem, transforming NVIDIA from a chipmaker into a full-stack computing powerhouse. Gross margins remain exceptional, underscoring its pricing strength in a market where demand far exceeds supply.
For SMH investors, NVIDIA is the engine of performance. It provides high-octane growth and unmatched exposure to the AI hardware boom, making it the most influential single position in the ETF.
2. Taiwan Semiconductor Manufacturing Company (TSM)
TSMC, the world’s largest contract chip manufacturer, carries a 9.8% weight in SMH. As the foundry behind NVIDIA, Apple, AMD, and countless others, TSMC controls the world’s most advanced semiconductor production, a crucial link in the global supply chain.
This year, TSMC has benefited from soaring demand for 3nm and 5nm chips used in AI servers and mobile devices. Its fabrication plants in Taiwan and expanding U.S. facilities in Arizona have positioned it as a strategic player not just in tech, but also in geopolitics. The company’s capital intensity is staggering, but its technological edge ensures consistent profitability and an unmatched market share.
For SMH investors, TSMC provides a stabilizing anchor amid the industry’s cyclical nature. It’s less volatile than pure design firms and serves as the foundation for global innovation.
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3. Broadcom (AVGO)
Broadcom, with an 8.1% weighting, rounds out SMH’s top three holdings. Known for its diversified portfolio of semiconductor and infrastructure software products, Broadcom has positioned itself as a quiet powerhouse in connectivity and data center solutions. Its chips are found in nearly every smartphone, router, and AI networking system.
In 2025, Broadcom’s acquisition of VMware continues to expand its software footprint, giving the company recurring revenue streams alongside its hardware business. Its AI-driven networking solutions have also benefited from data center expansion, making Broadcom one of the few semiconductor firms that successfully balances cyclical hardware demand with long-term software stability.
For SMH investors, Broadcom offers a blend of growth and resilience. It’s less volatile than NVIDIA, yet still tied to the same megatrends: AI, cloud infrastructure, and wireless connectivity.
What SMH Really Owns
The top three holdings, NVIDIA, TSMC, and Broadcom, account for over 36% of SMH’s weight, showcasing the ETF’s concentrated approach to capturing the semiconductor boom. Together, they cover the entire chip value chain: design, manufacturing, and connectivity. Below them, SMH includes critical equipment and materials suppliers such as ASML, Applied Materials, Lam Research, and KLA, which enable chipmakers to continue pushing the limits of Moore’s Law.
This concentration has been a strength, not a weakness. The ETF’s 40% YTD return reflects the sector’s extraordinary profitability and the market’s conviction that semiconductors are the new oil of the digital age. From smartphones and self-driving cars to AI data centers, the chips represented in SMH literally power the world.
Key Insights
- +40.3% YTD return, 56.0% CAGR over 0.76 years.
- Tracks the MVIS US Listed Semiconductor 25 Index.
- Top holdings: NVIDIA (18.9%), TSMC (9.8%), Broadcom (8.1%).
- Focused exposure to semiconductor design, fabrication, and equipment.
- Expense ratio: 0.35%, providing targeted access to a capital-intensive, high-growth sector.
- Semiconductors are the backbone of AI, cloud computing, EVs, and automation, SMH sits at the center of it all.
Why You Should Invest In SMH
The VanEck Semiconductor ETF (SMH) is a focused investment in one of the most essential and rapidly growing industries globally. Its 56% CAGR and 40% YTD gain underscore the sector’s strength and its importance in powering artificial intelligence, automation, and the global economy’s digital transformation.
While semiconductors can be cyclical, the long-term trajectory points upward. As chip demand continues to expand beyond consumer electronics into every facet of modern life, cloud computing, electric vehicles, and industrial automation, SMH offers exposure to the companies enabling that future.
For investors seeking to own the backbone of the AI era, SMH is hard to beat. It’s high risk, high reward, and high relevance, precisely what you want from a sector ETF positioned at the intersection of innovation and necessity.
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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!
