If you've seen the highlights from Nvidia's GTC conference this week, you may be feeling partially bullish about the semiconductor industry.
For those who haven't had a chance to check it out, Nvidia Founder and CEO Jensen Huang showcased the latest developments in artificial intelligence (AI). This included the latest in agentic and generative AI, as well as other exciting developments.
Semiconductors, also known as semis or chips, are found in a wide range of products, including computers, smartphones and gaming hardware.
According to Global X, the semiconductor industry is positioned for significant growth. The next generation of innovative technology, from large language models (LLMs) to robotics, will require semiconductors to power it.
PwC expects global semiconductor revenues to grow twice the speed of global GDP, exceeding $1 trillion by 2030.
Not just Nvidia
While Nvidia (NASDAQ: NVDA) has become the poster child for AI, other companies within the AI ecosystem also offer compelling investments.
For example, ASML Holding NV (NASDAQ: ASML) manufactures lithography machines, which are fundamental to producing semiconductor chips. This is the most expensive step in the chip-making process, with machines going for north of US$200 million. ASML is essentially the only player in this field, meaning companies like Nvidia and Apple (NASDAQ: AAPL) have no choice but to buy these machines to maintain their competitive position. This gives ASML incredible pricing power.
ASML's technology is also extremely capital intensive and complicated, and therefore difficult to replicate. This means their competitive position is rock solid.
Semiconductor exposure in a single trade
Bullish on the semiconductor industry, but can't pick a winner?
The good news for ASX investors is that they don't have to. They can gain exposure to the semiconductor industry in a single trade without having to pick a winner.
In fact, the ASX-listed exchange-traded fund (ETF) Global X Semiconductor ETF (ASX: SEMI) could be one of the hottest ASX ETFs to own this decade.
It contains a basket of companies with exposure to the semiconductor industry. While it contains 30 holdings, it is relatively concentrated in its top five positions.
As of 28 February, 2025, these were:
- Taiwan Semiconductor Manufacturing Co Ltd (9.7%)
- Nvidia (9.5%)
- Broadcom (9.2%)
- ASML Holding NV (9.2%)
- Texas Instruments (6.0%)
Unsurprisingly, 64% of holdings are in the United States, 13% are based in Taiwan, and the remainder are dispersed around the world.
With SEMI down around 4% over the past month following a broad tech sector sell-off, ASX investors have the chance to buy it now on sale.
SEMI has enjoyed strong capital growth over the past 5 years, climbing nearly 65%. This follows the AI phenomenon that has captivated investors over the past few years.
ASX investors can pick up this ETF for a management expense of 0.45%.
