The semiconductor industry remains a critical pillar of technological innovation, powering everything from AI to high-performance computing. While Nvidia dominates headlines, we aim to highlight lesser-known names that are making significant contributions to the semiconductor space. Investors looking for exposure to this sector can consider two key semiconductor ETFs: VanEck Semiconductor ETF (SMH) and VanEck Fabless Semiconductor ETF (SMHX). Below, we explore SMH's top holdings (excluding Nvidia) and highlight three unique holdings in SMHX to watch in 2026.

Why Chips Are a Critical Sector for Investors in 2026

• AI & Cloud Computing: Demand for advanced semiconductors continues growing as AI workloads expand across industries, with generative AI and large-scale inference driving a new wave of chip investment.
• Geopolitical & Supply Chain Shifts: U.S.-China trade tensions and government incentives (e.g., CHIPS Act) continue to influence semiconductor production strategies, with domestic fab buildouts gaining momentum. 
• Memory & Data Center Surge: AI model training and inference have significantly grown, fueling demand for high-bandwidth memory (HBM) and data center chips. This has lifted companies like Micron to the top five status in SMH.
• ASIC Growth: Application-Specific Integrated Circuits (ASICs) are becoming increasingly important in AI, crypto mining, and high-speed networking, driving innovation across the sector.

Top 5 Semiconductor Companies to Watch in SMH This Year^*

Holdings and weights as of 06/29/2026, excluding Nvidia (17.75%)

1. Taiwan Semiconductor Manufacturing Co. (TSMC) (9.04%)
• What They Do: The world's largest contract chip manufacturer, producing semiconductors for major companies like Apple and AMD.
• Outlook for 2026: With AI and high-performance computing demand driving greater chip complexity and volume, TSMC's position as the leading advanced-node contract manufacturer gives it exposure to long-term semiconductor growth trends. As a foundry, its results remain tied to capacity utilization, capital intensity, and the cyclical nature of global chip demand.
2. Micron Technology Inc (5.98%)
• What They Do: One of the world’s largest producers of NAND and DRAM flash memory chips, supplying data centers, mobile devices, PCs, and AI infrastructure globally.
• Outlook for 2026: With AI training and inference fueling demand for high-bandwidth memory (HBM) and high-density DRAM, Micron is positioned among the memory suppliers tied to data center and AI infrastructure growth. As a memory-centric business, its results remain subject to the historically cyclical nature of memory pricing and supply-and-demand dynamics.
3. Broadcom Inc. (5.49%)
• What They Do: Designs and develops semiconductor solutions, including chips for networking, broadband, and wireless communications.
• Outlook for 2026: Broadcom's portfolio spans custom AI accelerators, networking and connectivity silicon, and infrastructure software, giving it exposure to rising data center and AI networking demand. As a diversified semiconductor and software business, its results remain tied to hyperscaler capital-spending cycles, customer concentration, and competition across its networking and custom-silicon markets.
4. Advanced Micro Devices Inc (5.43%)
• What They Do: Compete with Intel in CPUs and GPUs, with a growing presence in AI and data center chips.
• Outlook for 2026: AMD's broadening lineup of data center CPUs, GPUs, and AI accelerators gives it exposure to rising demand for high-performance and AI computing. Its trajectory will continue to hinge on competition across the CPU and AI accelerator markets.
5. Intel Corp (5.09%)
• What They Do: Designs and manufactures microprocessors for data centers, PCs, and servers while executing a major strategic pivot to become a leading contract foundry through Intel Foundry Services.
• Outlook for 2026: Intel continues to pursue a multi-year strategic transition, including the build-out of Intel Foundry Services and advanced process nodes intended to restore its manufacturing competitiveness. Its progress across data center, client computing, and foundry will depend on execution against an ambitious roadmap in a highly competitive landscape.

Top Unique Holdings in SMHX (Not in SMH)

Holdings and weights as of 06/29/2026

1. Lattice Semiconductor Corp (3.96%)
• What They Do: Designs low-power, programmable Field-Programmable Gate Arrays (FPGAs) used in data centers, AI servers, industrial automation, and communications infrastructure.
• Outlook for 2026: Lattice's low-power, small-form-factor FPGAs serve edge, AI server, industrial, and communications applications that are linked to broader data center and automation trends. Demand for its programmable logic solutions remains tied to industrial and communications end-market cycles.
• ASIC Focus: Lattice's programmable FPGAs serve as a flexible complement and alternative to fixed-function ASICs, supporting AI-enabled edge and infrastructure designs where adaptability and low power are priorities.
2. SiTime Corp (3.62%)
• What They Do: Develops precision timing semiconductors using proprietary Micro-Electro-Mechanical Systems (MEMS) technology.
• Outlook for 2026: SiTime's MEMS-based precision timing solutions address growing demand for reliable timing across AI data centers, communications, automotive, and IoT systems. As electronic systems grow more complex and performance-sensitive, precision timing is a niche the company is positioned to serve.
• ASIC Focus: SiTime's precision timing components are increasingly designed into ASIC- and SoC-based architectures, where accurate, low-jitter timing supports high-speed AI, networking, and data center applications.
3. Rambus Inc (3.43%)
• What They Do: Specialize in memory and security chip solutions, playing a crucial role in high-performance computing.
• Outlook for 2026: As data center and AI workloads raise the bar for memory performance and data security, Rambus' memory interface and security intellectual property could remain relevant to high-performance computing trends. Its IP- and licensing-driven model offers exposure to these themes across a range of end-markets.
• ASIC Focus: Rambus' cryptographic security ASICs are increasingly vital in securing AI-driven and financial applications.

Accessing the Opportunities in The Semi Space

Investing in semiconductors requires an understanding of the market's cyclical nature and key industry drivers. Whether you're looking for broad exposure or a more targeted approach, ETFs can offer an efficient way to access the sector.

Key Takeaways for Accessing the Semiconductor Space:

• Diversification Matters: Investing in individual semiconductor stocks can be volatile. ETFs like VanEck Semiconductor ETF (SMH) and VanEck Fabless Semiconductor ETF (SMHX) provide diversified exposure to leading companies in the industry.
• AI, Data Centers, and Connectivity: As AI workloads, cloud computing, and 5G expansion accelerate, semiconductor demand is likely to remain resilient. Investors should consider exposure to companies driving these innovations.
• Understanding Fabless vs. Foundry: SMH provides exposure to both chip designers and manufacturers, while SMHX focuses exclusively on fabless semiconductor companies, which design chips but outsource manufacturing, offering a different risk/reward profile.
• Long-Term Growth Potential: With government support through initiatives like the CHIPS Act and increasing global semiconductor reliance, this sector remains a crucial long-term investment opportunity.

How to Invest in Semiconductors

For investors seeking broad exposure to the semiconductor industry, VanEck Semiconductor ETF (SMH) provides a diversified portfolio that includes both semiconductor designers and manufacturers, making it an attractive option for those looking to capture the industry's growth potential. Meanwhile, VanEck Fabless Semiconductor ETF (SMHX) focuses exclusively on fabless semiconductor companies, which benefit from high-margin chip design and innovation while avoiding the capital-intensive nature of manufacturing. By investing in these funds, investors can gain access to the evolving semiconductor landscape and capitalize on advancements in AI, IoT, and high-performance computing.

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