7 Best Semiconductor ETFs to Buy for 2026
Semiconductor investors have faced an increasingly volatile ride as the artificial intelligence infrastructure buildout continues amid high hyperscaler capital spending.
“AI remains the dominant structural driver across the semiconductor value chain,” says Rene Reyna, head of thematic and specialty product strategy at Invesco. “Data center buildouts are driving demand for numerous chip categories such as graphics processing units (GPUs), central processing units (CPUs), networking, memory, power management and manufacturing equipment.”
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Few semiconductor stocks illustrate the roller coaster-level of volatility better than Micron Technology Inc. (ticker: MU). After rallying to more than $1,255 per share in June, Micron shares fell roughly 25% over the following month to $848 on July 17 as investor expectations quickly reset.
In Micron’s case, investors identified memory chips, particularly dynamic random-access memory (DRAM) and NAND flash memory, as critical constraints on AI server deployment. When a component becomes a bottleneck, companies supplying it often experience rapidly rising earnings forecasts, expanding valuation multiples and increasingly optimistic analyst price targets.
“Memory has become a major upside driver for semiconductors because AI servers require high-bandwidth memory and advanced DRAM, creating a pricing and supply squeeze,” Reyna explains. “This can support pricing power and capital spending across the semiconductor ecosystem, benefiting chip designers, memory suppliers, foundries and equipment companies in particular.”
However, the reverse can happen just as quickly once projections become overly optimistic or supply begins catching up with demand. For example, SanDisk Corp. (SNDK), another major memory supplier, climbed to a 52-week high above $2,350 before falling roughly 38% over the following month.
Investors must also contend with a changing competitive landscape. While U.S. companies and manufacturers in allied countries continue to dominate advanced semiconductor design and fabrication, Chinese startups are making increasingly credible advances. China has long been one of the world’s largest electronics manufacturing hubs and one of the biggest consumers of semiconductors, yet domestic chipmakers have historically struggled to compete.
That gap has begun to narrow as Beijing invests heavily in chip development. The competitive threat has grown significant enough that, according to the Financial Times, U.S. lawmakers have urged the Trump administration to prohibit the use of certain Chinese memory chips.
Crowded trades and an increasingly competitive global landscape can therefore create above-average volatility for semiconductor investors. Those seeking exposure to the industry’s long-term growth while reducing company-specific risks may find a semiconductor exchange-traded fund, or ETF, more balanced.
Here are seven of the best semiconductor ETFs to buy for 2026:
| ETF | Expense Ratio |
| Roundhill Memory ETF (DRAM) | 0.65% |
| VanEck Semiconductor ETF (SMH) | 0.35% |
| VanEck Fabless Semiconductor ETF (SMHX) | 0.35% |
| VanEck China Semiconductor ETF (SMHC) | 0.65% |
| iShares Semiconductor ETF (SOXX) | 0.34% |
| Invesco PHLX Semiconductor ETF (SOXQ) | 0.19% |
| SPDR S&P Semiconductor ETF (XSD) | 0.35% |
Roundhill Memory ETF (DRAM)
“We’ve been thrilled to watch DRAM surpass $25 billion in assets and become the fastest-growing ETF in history,” says Thomas DiFazio, ETF strategist at Roundhill Investments. “Passing the iShares MSCI South Korea ETF (EWY
), a go-to for U.S. investors seeking exposure to SK hynix Inc. (SKHY) and Samsung Electronics Co. Ltd. (005930.KS), was a clear sign that the market wanted precise memory exposure.”
DRAM’s portfolio spans just 21 holdings, with Micron, SanDisk, Seagate Technology Holdings PLC (STX) and Western Digital Corp. (WDC) also featured. “Weighting factors such as revenue and overall market share, DRAM aims to allocate to the leaders behind this state-of-the-art technology that underpins the structural AI buildout underway,” DiFazio says. DRAM charges a 0.65% expense ratio.
VanEck Semiconductor ETF (SMH)
Investors seeking semiconductor exposure beyond the recent memory-driven trade may prefer SMH. With $67.4 billion in assets under management, it is the largest semiconductor ETF on the market, charging a 0.35% expense ratio. SMH’s largest positions in a portfolio of 26 stocks include Nvidia Corp. (NVDA), Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) and Broadcom Inc. (AVGO).
“Near-term, the backdrop for semiconductors remains supportive as hyperscalers continue to spend heavily on AI infrastructure and demand stays firm across compute, memory and networking enablers,” explains Nick Frasse, product manager at VanEck. “Long-term, we think the opportunity expands further as AI adoption spreads from data centers into enterprise use cases like edge computing and robotics.”
VanEck Fabless Semiconductor ETF (SMHX)
Semiconductor investors must also contend with supply chain disruptions stemming from geopolitical conflicts, trade restrictions and natural disasters. These risks tend to affect vertically integrated chipmakers and companies operating dedicated fabrication facilities the most. One way to mitigate this is via SMHX, which focuses on companies whose advantage lies in chip design rather than manufacturing.
“We believe SMHX is well positioned for an environment where design, architecture and intellectual property matter more and more,” Frasse says. “As advanced compute becomes harder to scale efficiently, the ability to deliver better performance per watt and per dollar becomes increasingly valuable, which we see as a key advantage for fabless semiconductor companies moving forward.”
[Read: 6 of the Best AI ETFs to Buy for 2026]
VanEck China Semiconductor ETF (SMHC)
Many Chinese semiconductor companies are not readily accessible to U.S. investors because they do not trade as American depositary receipts. ETF issuers, however, can access local markets directly and package those holdings into a U.S.-listed fund, giving investors convenient dollar-denominated exposure to China’s growing semiconductor industry. For that purpose, SMHC charges a 0.65% expense ratio.
Importantly, SMHC tracks an index that excludes companies subject to U.S. sanctions, meaning firms restricted because of national security, military or other regulatory concerns are intentionally omitted. However, the underlying Chinese securities remain less liquid than their U.S. counterparts. As a result, SMHC currently trades with a relatively wide 0.39% 30-day median bid-ask spread.
iShares Semiconductor ETF (SOXX)
SOXX is smaller than SMH but remains one of the industry’s largest semiconductor ETFs, with approximately $46 billion in assets under management. Having launched more than two decades ago in July 2001, the fund charges a slightly lower 0.34% expense ratio while tracking 30 companies in the NYSE Semiconductor Index. It is also highly liquid, with a 0.04% 30-day median bid-ask spread.
While SOXX shares several top holdings with SMH, including Nvidia, Broadcom and Taiwan Semiconductor Manufacturing, its portfolio is less top-heavy. For SOXX, Nvidia represents a smaller 8.5% of assets compared to 21% in SMH, allowing for more balanced exposure across competitors such as Advanced Micro Devices Inc. (AMD), Texas Instruments Inc. (TXN) and Intel Corp. (INTC).
Invesco PHLX Semiconductor ETF (SOXQ)
While smaller than SMH and SOXX, with $2.4 billion in assets under management, SOXQ stands out for its low 0.19% expense ratio, making it one of the most affordable semiconductor ETFs available. The fund tracks 30 of the largest U.S.-listed companies in the PHLX Semiconductor Sector Index, with constituents added or dropped annually each September and the portfolio rebalanced quarterly.
SOXQ can also be useful for tax-loss harvesting. Because it tracks a different semiconductor index than SMH or SOXX, investors may be able to realize a capital loss while maintaining similar exposure. Although the IRS has not precisely defined “substantially identical,” different benchmarks generally reduce wash-sale concerns without requiring investors to sit out of the market for 30 days.
SPDR S&P Semiconductor ETF (XSD)
Investors looking to further reduce concentration risk may prefer XSD. Unlike market-cap-weighted semiconductor ETFs such as SMH, SOXX and SOXQ, XSD equally weights each of its 48 holdings at every quarterly rebalance, giving the same representation to an industry giant like Nvidia as it does to a small- or mid-cap semiconductor company. The ETF charges a 0.35% expense ratio.
XSD’s equal-weight approach comes with both advantages and trade-offs. During strong bull markets, systematically trimming winners and adding to laggards can dampen momentum and potentially reduce returns. Later in the semiconductor cycle, however, avoiding heavy exposure to a handful of mega-cap names may help reduce the portfolio’s sensitivity to sharp swings in individual stocks.
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7 Best Semiconductor ETFs to Buy for 2026 originally appeared on usnews.com
Update 07/22/26: This story was published at an earlier date and has been updated with new information.