One consequence of the AI boom and the outperformance of has been a steady increase in investor risk tolerance. Specifically, investors have become increasingly willing to pay above-average fees for highly concentrated exchange-traded funds, or ETFs.
The clearest example is the launch of the Roundhill Memory ETF (ticker: ). According to ETF.com, DRAM became the fastest ETF in history to reach $10 billion in assets under management, or AUM, accomplishing the feat in just 43 days. Three companies alone, Micron Technology Inc. (), SK Hynix (000660.KS) and Samsung Electronics Co. (005930.KS) account for about 75% of the ETF’s assets.
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“Until DRAM’s launch, investors lacked a single-ticker solution offering precise exposure to global memory stocks,” says Thomas DiFazio, ETF strategist at Roundhill Investments. “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.”
ETF issuers are not stopping with , either. While several competitors have already launched rival memory-focused funds, another niche of the semiconductor market has begun attracting attention: . Photonics refers to the generation, transmission and processing of information using light rather than electrical signals.
As processors become faster, moving information efficiently between chips, servers and networking equipment have become just as important as improving raw computing power. Optical interconnects and photonic components help solve that challenge by transmitting data faster and with lower power consumption than traditional electrical connections.
Memory and photonics share an important characteristic: Both represent potential bottlenecks in the semiconductor value chain. Advanced AI accelerators are of little use without sufficient high-bandwidth memory to feed them data. Likewise, increasingly powerful chips can lose efficiency if networking infrastructure cannot move information quickly enough between systems.
For investors, bottlenecks can create short-term opportunities. When demand surges and supply struggles to keep pace, companies controlling those critical parts of the value chain can experience outsized revenue growth, expanding margins and strong stock performance.
The challenge is that many of these highly specialized ETFs may not be suitable as long-term core holdings. Investors are often making concentrated bets on a small group of companies that have already delivered exceptional returns, creating increasingly crowded trades.
Investors seeking to make semiconductors a long-term portfolio allocation may prefer broader industry ETFs instead. Many offer lower-fee exposure across chip designers, manufacturers and equipment suppliers. Several also boast track records spanning a decade or longer, and charge lower fees.
Here are seven of the best semiconductor ETFs to buy for 2026:
| ETF | Expense Ratio |
| VanEck Semiconductor ETF () | 0.35% |
| VanEck Fabless Semiconductor ETF () | 0.35% |
| iShares Semiconductor ETF () | 0.34% |
| SPDR S&P Semiconductor ETF () | 0.35% |
| Invesco Semiconductors ETF () | 0.56% |
| Invesco PHLX Semiconductor ETF () | 0.19% |
| Global X AI Semiconductor & Quantum ETF () | 0.50% |
VanEck Semiconductor ETF ()
“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.”
SMH is currently the largest U.S.-listed semiconductor ETF, with $72 billion in AUM. It tracks the MVIS U.S. Listed Semiconductor 25 Index, which emphasizes market capitalization and liquidity for inclusion. This methodology has allowed winners like Nvidia Corp. () to compound, with the stock now sitting at 14.3% of SMH’s portfolio. SMH charges a 0.35% expense ratio.
VanEck Fabless Semiconductor ETF ()
Not all semiconductor companies actually manufacture the chips they design. While some firms are vertically integrated and others operate dedicated foundries, many focus on design, with their competitive advantage rooted in research and development. By outsourcing production, they can avoid the capital intensity associated with chip manufacturing while also reducing certain supply chain risks.
“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.”
iShares Semiconductor ETF ()
“The potential benefits of investing in semiconductor ETFs include exposure to a high-growth industry with strong fundamentals, diversification across multiple companies in the industry and the potential for long-term capital appreciation,” says Sean August, CEO of the August Wealth Management Group. Investors seeking the growth potential of SMH with less concentration may prefer SOXX instead.
This ETF tracks 30 companies represented by the NYSE Semiconductor Index. Instead of overweighting Nvidia, SOXX’s top holdings are more evenly distributed between Micron Technology, Advanced Micro Devices Inc. (), Marvell Technology Inc. (), Intel Corp. () and Broadcom Inc. (). The ETF charges a 0.34% expense ratio and currently has just under $43 billion in AUM.
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SPDR S&P Semiconductor ETF ()
“When looking for semiconductor ETFs, investors should consider factors such as the expense ratio, the underlying index or benchmark, the fund’s holdings and diversification strategy, and the ETF’s historical performance,” August says. “It is also important to assess the fund’s liquidity to ensure that it is easy to buy and sell.” Investors seeking to reduce concentration further may find XSD appealing.
XSD is equal-weighted, giving small-, mid- and large-cap holdings identical allocations. This reduces reliance on a handful of dominant chip stocks and provides more balanced industry exposure. The trade-off is that winners are regularly trimmed during quarterly rebalances, which has historically caused XSD to lag market-cap-weighted funds such as SMH and SOXX. XSD charges a 0.35% expense ratio.
Invesco Semiconductors ETF ()
“AI remains the dominant structural driver across the semiconductor value chain,” explains 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.”
Investors looking for a potential way to outperform traditional market-cap-weighted semiconductor ETFs can use PSI. This ETF screens holdings based on fundamental factors such as price momentum, earnings momentum, quality, management action and value. Holdings are reselected and reweighted each quarter to ensure they continue meeting the methodology. PSI charges a 0.56% expense ratio.
Invesco PHLX Semiconductor ETF ()
“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.”
Investors who prioritize low fees may find SOXQ appealing. The ETF charges just 0.19% to track the PHLX Semiconductor Sector Index, well below the 0.35% expense ratios charged by other similar funds. On a $10,000 investment, that translates to roughly $19 in annual fee drag versus $35. While less well-known than some rivals, SOXQ remains a sizable fund in its own right, with just over $2.6 billion in AUM.
Global X AI Semiconductor & Quantum ETF ()
“The semiconductor shift is most visible on three fronts: the transition from general-purpose processors to AI-optimized chips, the use of high-bandwidth memory to handle AI’s data intensity and the rise of ultra-fast interconnect solutions that bind AI servers together,” says Tejas Dessai, director of thematic research at Global X ETFs. For semiconductor exposure, Global X offers CHPX.
Much of CHPX’s portfolio overlaps with SOXX and SMH, while a smaller allocation targets firms. Unlike traditional semiconductor companies, many of these quantum names are small-cap, unprofitable businesses whose value rests largely on future commercialization potential. That additional exposure comes at a higher cost, so CHPX charges a 0.5% expense ratio.
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Update 06/15/26: This story was published at an earlier date and has been updated with new information.
