Semiconductor Market Surges: How to Invest with ETFs

The Growing Semiconductor Market: Opportunities and Challenges

The semiconductor market has experienced significant evolution in recent years, marked by challenges and opportunities in a dynamic global context.
In 2023, global semiconductor sales reached $520 billion, showing a slight decrease compared to the previous year due to global economic difficulties and reduced demand in consumer markets.
However, there has been a strong recovery in the past year, with some ETFs gaining over 80%.

Semiconductors: Leading Market Sectors

Smartphones play a crucial role in the semiconductor industry, with increasing demand driven by emerging technologies such as 5G, artificial intelligence, and immersive applications.
In 2023, semiconductor sales for smartphones accounted for approximately 20% of the sector’s revenue.
Additionally, the personal computing device market represented 17% of the overall market.

Another area of significant growth is in servers and data centers, particularly with the adoption of GPUs for hardware acceleration and generative artificial intelligence, as seen in applications like ChatGPT.
Industrial and automotive applications are also witnessing a rise in demand for advanced semiconductors as production systems and vehicles become increasingly intelligent and connected.

Major Players in the Industry: Intel vs Nvidia

The semiconductor supply chain is complex and includes key companies in design and production.
Major players in the sector include integrated device manufacturers (IDMs) like Intel, Samsung, SK Hynix, and Micron.
In 2023, Intel maintained the largest market share, with over $48 billion in revenue.

In addition to IDMs, the market encompasses companies like Nvidia, Qualcomm, and Broadcom, which rely on foundries such as Taiwan Semiconductor Manufacturing Company (TSMC) for chip production.
TSMC, in particular, is the world’s largest foundry and plays a crucial role in semiconductor manufacturing.

Electronic design automation (EDA) companies like Cadence Design Systems and Synopsys provide essential software for chip design, while specialists like ASML and Applied Materials offer semiconductor manufacturing equipment.
Now, let’s explore the top-performing ETFs over the past year that could benefit from this market growth.

Top ETFs in the Semiconductor Sector: Performance and Investment Opportunities

Over the last 12 months, ETFs focusing on the semiconductor sector have demonstrated impressive performance, reflecting the sector’s increasing importance.

1.
**Fineco AM MSCI World Semiconductors and Semiconductor Equipment UCITS ETF EUR Acc:**
This ETF tracks the MSCI World Semiconductors and Semiconductor Equipment Index, which includes large and mid-cap companies in the semiconductor industry across 23 developed markets.
With an annual total expense ratio (TER) of 0.38%, the ETF has shown exceptional growth, recording a 98% increase in the last year.

2.
**Amundi MSCI Semiconductors ESG Screened UCITS ETF Acc:**
Another notable ETF is the Amundi MSCI Semiconductors ESG Screened UCITS ETF Acc, which replicates the MSCI ACWI Semiconductors & Semiconductor Equipment ESG Filtered Index.
This index includes large and mid-cap companies in 23 developed and 24 emerging markets filtered based on environmental, social, and corporate governance (ESG) criteria.
With an annual TER of 0.35%, the ETF has shown a growth of 85.47% in the last year.

Outlook and Future Perspectives

The semiconductor market is expected to continue growing in the coming years, driven by technological innovation and increasing demand in key sectors such as artificial intelligence, 5G, and industrial automation.
ETFs focused on this theme offer an interesting opportunity for investors, providing exposure to a dynamic and evolving market.

Investors should closely monitor industry developments and consider factors such as market volatility, government policies, and emerging technological trends.
With a well-informed investment strategy, semiconductor ETFs can offer significant returns and help diversify portfolios in an increasingly digital age.