One of the best ASX ETFs to own over the last 12 months has been the Global X Semiconductor ETF (ASX: SEMI).
It has risen an impressive 148% in that span.
A new report from Global X has identified the key catalysts for this growth, and why these are only likely to continue.
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Fund overview
The Global X Semiconductor ETF seeks to invest in companies that stand to potentially benefit from the broader adoption of tech-enabled devices that require semiconductors. This includes the development and manufacturing of semiconductors.
It provides exposure to 30 of the world's largest semiconductor companies through the Solactive Global Semiconductor 30 Index.
Rather than trying to pick the next breakout AI winner, the ETF offers diversified exposure across the global semiconductor supply chain.
For those unfamiliar, a semiconductor is a material that can both conduct and block electricity, depending on how it's used.
This unique ability makes semiconductors essential to modern technology. They're used to create microchips that power smartphones, computers, cars, and medical equipment.
Why business is booming
Semiconductors are the "brains" inside modern technology. They process information, store memory and power computation. Without them, AI simply does not exist.
The semiconductor industry sits at the centre of several major structural themes:
- Artificial intelligence and data centres
- Cloud computing
- Electric vehicles and autonomous driving
- Robotics and automation
- Defence technology
- Consumer electronics
According to Global X, as AI adoption accelerates, demand for advanced chips has exploded.
Training large AI models requires enormous computing power, which in turn requires increasingly sophisticated semiconductors.
That has created a powerful tailwind for the companies designing chips, manufacturing them and supplying the equipment needed to build them.
The companies leading the way
This ASX ETF includes 30 holdings, including strong exposure to the four companies powering the AI boom.
According to Global X, one of the reasons semiconductor investing has become so compelling is that the industry contains some of the most strategically important companies in the world, including:
- Nvidia (NASDAQ: NVDA) – is a leader in the AI revolution because its GPUs power many advanced AI systems and data centres.
- Taiwan Semiconductor Manufacturing (NYSE: TSM) – is vital to the global tech industry, producing many of the world's most advanced chips for companies like Nvidia and Apple.
- ASML (NASDAQ: ASML) – is essential because it is the only company that makes EUV lithography machines needed to manufacture cutting-edge semiconductors.
- Broadcom (NASDAQ: AVGO) – plays an important role in AI by designing custom chips for major technology companies such as Google and Meta.
The opportunity for investors
Semiconductors have become one of the defining investment themes of the decade because they sit at the intersection of AI, automation and digital infrastructure.
However it is important investors are aware that semiconductor stocks can be volatile, particularly after strong rallies.
The long-term investment case increasingly centres on the idea that chips are no longer cyclical industrial products alone; they are now strategic infrastructure for the digital economy.
For retail investors looking to better understand the AI boom, semiconductors may be one of the clearest places to start. And rather than trying to identify the next individual winner, diversified exposure through vehicles like Global X Semiconductor ETF (SEMI) offers a way to participate in the broader transformation underway across global technology markets.
