Could a chip ETF be your smartest investment in 2025?

The Gold Rush of Infrastructure in the Wave of AI

Instead of betting on which company can develop the strongest AI, it is better to invest directly in the chip industry that supports AI operation. This is currently the most pragmatic investment logic in the market.

The Hard Power of SMH ETF

The VanEck Semiconductor ETF ( NASDAQ: SMH ) tracks the performance of 25 of the largest chip companies in the United States. The data speaks for itself:

• 38% increase in 2025 vs Nasdaq 17% (outperforming the market by more than double)
• Top Five Holdings account for nearly 50%: Nvidia ( 18.5% ) → TSMC ( 19.5% ) → Broadcom ( 18.1% ) → Micron ( 16.8% ) → AMD ( 16.6% )
• The fee rate is only 0.35% (annual $10,000 investment cost is only $35)

Why These Chip Companies Are Worth Paying Attention To

NVIDIA: The king of GPUs for AI data centers, up 35.8% in 2025.

TSMC: The world's largest semiconductor foundry, responsible for producing chips designed by NVIDIA, Broadcom, and others.

Broadcom: The designer of AI accelerators has recently reached a $10 billion custom chip collaboration with OpenAI.

Micron: Provides DRAM memory chips essential for AI computing, surging 172% in 2025.

AMD: Data center CPU supplier, up 91.4% this year.

How big is the market space?

According to data from Grand View Research:

• Global AI market size in 2024: $279 billion
• Expected scale in 2033: 3.5 trillion USD
• Compound Annual Growth Rate: 31.5%

This is not hype – it is real, fundamental growth. Chips, as the infrastructure for AI, are the most certain beneficiaries.

Why Choose ETFs Over Individual Stocks

Instead of going all in on a single chip stock, it is smarter to diversify by investing in a portfolio of 25 leading companies. This way, you can avoid the risk of losses while benefiting from the growth dividends of the entire sector.

The key is to hold for the long term - market fluctuations are inevitable, but the long-term logic of the chip industry remains unchanged.