Top-Ranked Semiconductor ETFs to Buy as Taiwan-US Agree on $500B Chip Deal

Core Insights - The United States and Taiwan have finalized a historic trade agreement to jointly build chips and chip factories in the U.S., with Taiwanese semiconductor companies committing to invest at least $250 billion in U.S. chip production capacity [2] - The U.S. will provide tariff relief to Taiwan, capping rates at 15% and committing to zero tariffs on certain products, which is expected to bolster the U.S. semiconductor industry [3] - This agreement is designed to enhance U.S. supply chain security and counter China's technological advancements, creating a favorable environment for semiconductor investments [4] Deal Breakdown and Beneficiaries - The agreement aims to boost the U.S. semiconductor industry, providing tariff relief to Taiwan in exchange for significant investments in U.S. chip manufacturing [5] - Taiwan Semiconductor Manufacturing Company (TSM) is the primary beneficiary, having already invested $40 billion in Arizona and committed to spending $100 billion in U.S. plants, with the new deal offering long-term tariff certainty [6] - The deal will also benefit semiconductor equipment giants like Applied Materials, ASML, Lam Research, and KLA Corporation, as demand for new fabs increases [7] - Major U.S. tech firms such as Nvidia, Microsoft, Broadcom, and Apple will benefit from closer proximity to TSMC and potentially lower chip import costs [8] - Micron Technology, a significant U.S. memory chip manufacturer, aligns well with the deal's goals and stands to gain from a stronger U.S. supply chain [9] Semiconductor ETFs - The finalized U.S.-Taiwan deal is expected to drive momentum in semiconductor ETFs, with funds like SMH, SOXX, and SOXQ providing diversified exposure to chipmakers and equipment firms [10] - The VanEck Semiconductor ETF (SMH) has net assets of $42.49 billion, with a 57.1% increase over the past year, and includes top holdings like Nvidia and TSM [14] - The iShares Semiconductor ETF (SOXX) has net assets of $20.28 billion, with a 51.9% increase over the past year, featuring top holdings such as Micron and Nvidia [15] - The Invesco PHLX Semiconductor ETF (SOXQ) has a market value of $921.5 million, with a 52.7% increase over the past year, and includes major holdings like Nvidia and Advanced Micro Devices [16]