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Market Analysis2025-09-24
Semiconductor Supply Chain Normalization Accelerates, Outlook for Related ETFs Brightens
As the global semiconductor supply chain enters a normalization phase following the pandemic, the investment outlook for related ETFs has improved significantly. In particular, with growing demand from AI and autonomous vehicles alongside the accelerated development of next-generation semiconductor technologies, differentiated investment opportunities are emerging across sub-sectors.
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As the global semiconductor industry overcomes supply chain bottlenecks and enters a new growth trajectory, interest among related ETF investors has intensified. With differentiated growth momentum emerging across sub-sectors such as AI semiconductors, automotive chips, and memory chips, this is a moment that calls for strategic investment approaches using a portfolio calculator. The expansion of investment by major semiconductor-producing nations including Taiwan, South Korea, and the United States, coupled with ongoing restructuring of the global supply chain, is creating new investment opportunities.
Explosive Growth in AI Semiconductor Demand Drives Rapid Earnings Growth
The proliferation of generative AI services including ChatGPT has driven explosive demand for GPUs and AI-dedicated chips, propelling rapid earnings growth among related companies. NVIDIA's data center revenue surged more than 400% year-over-year, while AMD and Intel have committed massive investments to AI chip development. This growth trajectory is significantly boosting returns for semiconductor ETFs, particularly SMH (VanEck Semiconductor ETF) and SOXX (iShares Semiconductor ETF). According to portfolio calculator analysis, ETFs with higher exposure to companies deriving significant revenue from AI semiconductors have recorded annual returns 15-25% higher than general technology ETFs. Rebalancing calculator analysis also showed that increasing the portfolio allocation to AI semiconductor ETFs from 10% to 15-20% materially improves overall portfolio returns. Asset allocation calculator simulations projected that related ETFs could sustain compound annual growth rates above 25% over the next three to five years, as AI infrastructure investment continues to expand.
Expansion of the EV and Autonomous Vehicle Semiconductor Market
The growing adoption of electric vehicles and advances in autonomous driving technology are driving rapid growth in the automotive semiconductor market. In particular, demand for high-value-added chips used in battery management systems, powertrains, and ADAS (Advanced Driver Assistance Systems) is surging, drawing attention to the growth prospects of related companies. Strong share price gains at automotive semiconductor specialists such as Infineon, STMicroelectronics, and ON Semiconductor have also improved the performance of European semiconductor ETFs. Portfolio calculator analysis found that companies deriving more than 30% of total revenue from automotive semiconductors have achieved share price appreciation roughly twice the industry average. Rebalancing calculator analysis indicated that incorporating EV-related semiconductor ETFs by reallocating a portion of existing energy sector ETF holdings is an effective strategy for portfolio diversification. Asset allocation calculator analysis suggests that as the automotive industry electrification transition accelerates, the long-term investment appeal of related semiconductor ETFs will continue to rise.
Memory Semiconductor Cycle Turns Upward, Korean Companies Poised to Benefit
As the memory semiconductor market completes its inventory correction and transitions to an upcycle, earnings at Korean companies such as Samsung Electronics and SK Hynix, as well as global memory players like Micron Technology, are recovering sharply. In particular, rising demand for high-value-added products such as DDR5 and HBM (High Bandwidth Memory) is lifting the profitability of memory manufacturers. This improvement is directly reflected in the performance of Korean ETFs and global technology ETFs that include memory semiconductor holdings. Portfolio calculator analysis indicated that the memory semiconductor cycle upcycle is expected to boost returns of related ETFs by 20-30% within six months. Backtesting with the rebalancing calculator also showed that portfolios which increased their allocation to memory semiconductor ETFs at the cycle trough outperformed general technology portfolios. The asset allocation calculator recommends categorizing memory semiconductor ETFs as core holdings within an Asia-focused allocation and incorporating them into a geographically diversified investment strategy.
Semiconductor Equipment and Materials Industries Growing in Tandem
Alongside rising semiconductor demand, the semiconductor manufacturing equipment and materials industries are growing in lockstep. Order backlogs at equipment companies such as ASML, Applied Materials, and Lam Research, as well as materials suppliers including Shin-Etsu Chemical and SUMCO, have reached record highs, raising the investment value of related ETFs. In particular, surging demand for advanced process equipment such as EUV lithography systems and ALD (Atomic Layer Deposition) tools is further reinforcing the market dominance of technologically capable companies. Portfolio calculator analysis projected that semiconductor equipment companies revenues will grow at a compound annual rate of more than 20% over the next three years, reflecting a high long-term investment value for related ETFs. The rebalancing calculator recommends a strategy of combining finished semiconductor ETFs with equipment and materials ETFs to achieve diversified exposure across the entire semiconductor value chain. Asset allocation calculator analysis also notes that semiconductor equipment and materials ETFs carry some defensive characteristics, which can contribute to overall portfolio stability.
Geopolitical Risks and Investment Strategies for Supply Chain Diversification
The intensifying US-China technology rivalry and rising geopolitical tensions are accelerating the regional realignment of semiconductor supply chains, requiring corresponding adjustments to investment strategy. As domestic semiconductor policies take hold in earnest including the US CHIPS Act and the European Chips Act, performance divergence among regional semiconductor ETFs is widening. There is also growing interest in companies based in emerging semiconductor hubs such as India, Vietnam, and Mexico. Geopolitical risk analysis using the portfolio calculator showed that globally diversified semiconductor investments offer better risk-adjusted returns than those concentrated in a single country or region. The rebalancing calculator proposes a dynamic rebalancing strategy that enables prompt adjustment of regional semiconductor ETF weightings in response to geopolitical events. The asset allocation calculator recommends a baseline geographic allocation of United States (40%), Asia (35%), and Europe (25%), with the flexibility to adjust based on political uncertainty or trade dispute conditions.
Conclusion
The normalization of semiconductor supply chains and the rise of new growth drivers such as AI and electric vehicles are substantially increasing the investment appeal of semiconductor ETFs. However, a cautious approach that accounts for geopolitical risks and technology cycle dynamics remains essential. Use the rebalancing calculator to determine the optimal weighting across the semiconductor value chain, and leverage the asset allocation calculator to build a geographically diversified strategy. Visit /guide/semiconductor-etf for a detailed guide to semiconductor ETF investment strategies.
