New York, July 8, 2026, 17:01 (EDT)
- VanEck’s SMH last traded near $593, up about 2%, after falling below a key trend line on Tuesday.
- VanEck’s SMHX and Invesco’s PSI have posted big 2026 gains while excluding Taiwan Semiconductor Manufacturing from their portfolios.
- Chip shares recovered on Wednesday, but analysts said AI expectations and memory-chip pricing remain the test.
The VanEck Semiconductor ETF rebounded on Wednesday, but the move did not settle the sharper question hanging over the chip trade: what investors actually own when they buy a semiconductor fund.
SMH last traded at about $593, up roughly 2%, a day after selling pressure pushed the fund below its 50-day moving average, a trend line that tracks the average price over the past 50 sessions and is watched by traders as a momentum gauge. Seeking Alpha said market analyst Mike Zaccardi had flagged the break as the fund headed for its weakest close since late May.
That matters now because semiconductor exchange-traded funds, or ETFs — baskets of stocks that trade during the day like ordinary shares — have become a quick way to buy the artificial intelligence buildout. The past two sessions showed the trade is not one thing. Investors are sorting between chip designers, memory makers, foundries, equipment suppliers and broader tech exposure.
Tuesday’s selloff was sharp. The Nasdaq lost 1.16%, while the PHLX Semiconductor Index dropped 4.65% after Samsung Electronics’ strong preliminary profit failed to meet the market’s high bar for AI memory demand. “Expectations have gotten to be almost impossible to beat for these companies,” said Zachary Hill, head of portfolio management at Horizon Investments. Reuters
By Wednesday, chips had clawed back some ground. The PHLX chip index rose 2.23%, Broadcom gained 4.8% after Apple said it would spend more than $30 billion under a chip-supply agreement, and Nvidia rose 3.65%. The broader tape was weaker: the S&P 500 fell 0.28%, the Dow lost 1.09%, and the Nasdaq gained 0.20%.
The linked reports put a more structural issue in view. The VanEck Fabless Semiconductor ETF, SMHX, was up 58.48% for 2026 through July 6, according to 24/7 Wall St., yet it does not hold Taiwan Semiconductor Manufacturing, the contract manufacturer that makes chips for many of the designers in the fund. VanEck’s own page showed SMHX’s year-to-date return at 52.63% as of July 7, after the pullback.
The reason is in the word “fabless.” Fabless companies design chips but outsource production. VanEck says SMHX tracks an index of U.S.-listed fabless semiconductor companies; its top holdings as of July 7 were Nvidia at 20.11%, Broadcom at 15.30%, AMD at 5.84%, Astera Labs at 5.33% and Qualcomm at 4.90%. TSMC, a foundry, sits outside that design-only screen. ETF & UCITS Fund Manager | VanEck
Invesco’s PSI tells a similar story from a different angle. 24/7 Wall St. said the Invesco Semiconductors ETF had gained 102.37% from Dec. 31 through July 6 while holding no TSMC, despite TSMC’s role as a key supplier to Nvidia, AMD and Apple. PSI last traded at $151.33, up about 2.2% on Wednesday.
SMH is built differently. VanEck data show the broader fund held TSMC at 9.54% of assets as of July 7, second only to Nvidia at 19.57%. The iShares Semiconductor ETF, SOXX, another large peer, also bounced on Wednesday, last trading at $562.03, up about 2.0%. The competitive point is simple: funds with similar names can carry very different supply-chain bets.
The pressure is not only in U.S. ETFs. In Seoul, Samsung shares fell as much as 7.6% and SK Hynix dropped as much as 5.2% on Wednesday as investors questioned how long memory-price gains can last. Park Yuak at Kiwoom Securities cut his Samsung target by about 9%, while JPMorgan said memory prices would remain the key earnings driver in the second half.
The risk is that the AI capital expenditure trade — the spending by cloud firms and others on data centers and related hardware — has already priced in too much good news. If memory price increases slow, if customers balk at higher component costs, or if geopolitical stress hits supply chains, the funds that ran hardest could give back more. Funds that exclude TSMC may also miss any direct benefit if foundry pricing power becomes the next leg of the chip cycle.
There is a broader market risk as well. Oil jumped after President Donald Trump said an interim Iran deal was “over,” adding another source of inflation concern. “Duration is the key here,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “How long does this go on?” Reuters
For now, the rebound keeps the semiconductor trade alive. But after Tuesday’s break and Wednesday’s bounce, the story is less about owning “chips” and more about which layer of the chip stack an investor is buying.
