Under the Spotlight: Global X Semiconductor ETF ($SEMI)

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If Under the Spotlight has felt a little memory obsessed lately, there’s a good reason: over the past 12 months, the once-unfashionable corner of the chip market has become one of the biggest stories in global equities.

That same theme is written across the ASX ETF leaderboard.

The Global X Semiconductor ETF ($SEMI) returned 161% in FY26, making it the second-best-performing ETF on the ASX. The only fund ahead of it was the iShares MSCI South Korea ETF ($IKO), which also benefited from the extraordinary run in Asian memory stocks.

SEMI holds companies from across the semiconductor industry, but its exposure to memory producers and the equipment makers supplying the boom gave it an edge.

Stake investors took notice, with trade orders jumping 260% from the previous financial year. Let’s put the ETF under the spotlight.

Chip market hits overdrive

Until very recently, the global semiconductor market was predicted to reach US$1T by 2030. It’s now on track to hit that milestone four years early.

World Semiconductor Trade Statistics expects the global market to grow 90% to US$1.51T by the end of 2026. Most of that growth is thanks to memory, with the segment forecast to surge around 250% to over US$800B.

AI data centres require huge volumes of high-bandwidth memory, or HBM, which allows processors to move enormous amounts of data quickly. HBM is also more complex and capacity-intensive to produce than conventional memory, which has tightened supply across the industry.

The shortage has flowed through to this year’s earnings. U.S. memory giant Micron ($MU) reported fiscal second-quarter revenue of US$23.9B, up 196% from a year earlier. SK Hynix ($SKHY), the world’s biggest producer of HBM, posted record Q1 revenue of 52.6T won, an increase of 198%. Both firms are expected to see annual revenue more than triple YOY in FY26.

What's inside SEMI

SEMI tracks the Solactive Global Semiconductor 30 Index, a portfolio of 30 large companies involved in the development and manufacturing of semiconductors.

Its biggest holdings are currently Micron, AMD ($AMD) and SK Hynix, followed by Taiwan Semiconductor Manufacturing ($TSM), Nvidia ($NVDA) and Broadcom ($AVGO). Nearly one-fifth of the portfolio is invested in Micron and SK Hynix alone.

But the portfolio also includes the makers of the specialised machines and equipment needed to make these advanced chips, such as ASML Holding ($ASML), Applied Materials ($AMAT) and Lam Research ($LRCX).

This gives investors exposure across much of the semiconductor value chain, from memory and chip design to foundries, manufacturing equipment and testing.

To be included, firms need a free-float market capitalisation above US$1B, sufficient liquidity and a primary listing in a developed market. Taiwan and South Korea are included, while mainland Chinese A-share listings are excluded.

That global reach gave SEMI direct exposure to Asia’s memory leaders, including SK Hynix well before its Nasdaq listing, alongside the better-known U.S. names.

The fine print

SEMI charges an annual management (MER) fee of 0.45%, which is about average for a thematic ASX-listed ETF. 

Companies are weighted by free-float market capitalisation but capped at 10% at each quarterly rebalance. This stops Nvidia, or any other giant, from swallowing the portfolio whole. Price movements between rebalances can still push a company above the cap, which is why Micron now accounts for more than 11% of the fund.

The cap offers some protection from single-stock risk, but SEMI remains concentrated. Its six largest holdings account for more than half the portfolio, and investors who already own broad technology or Nasdaq ETFs may be doubling up on U.S. giants like Nvidia, AMD and Broadcom.

Its reported 12-month distribution yield was 7.36% as of 2 July. That looks unusually high for a growth-oriented technology ETF, but it shouldn't be mistaken for a reliable stream of dividends. ETF distributions can vary significantly each year depending on the fund’s performance.

SEMI is also unhedged. Because every holding is listed overseas, returns are affected by movements in the Australian dollar. A stronger AUD can reduce gains when overseas returns are converted into local currency, while a weaker dollar can provide a boost.

Is it a buy?

Had we put SEMI under the spotlight 12 months ago, the answer would look fairly obvious in hindsight. After a 161% run, today’s decision comes with a higher degree of difficulty.

The investment case remains compelling. AI infrastructure spending continues to climb, memory supply is tight and SEMI offers exposure to more of the chip industry than the headline GPU names alone. Its Asian holdings are also difficult to replicate through many U.S.-focused tech funds.

The risk is that investors are paying after an extraordinary rerating. Memory is famously cyclical, and today’s shortages will eventually encourage more capacity. A slowdown in AI spending, weaker chip prices or a faster-than-expected supply response could hit several of SEMI’s largest holdings at once.

For investors seeking long-term semiconductor exposure and willing to accept the volatility, SEMI remains one of the most complete options on the ASX. But after a year when almost everything went right, the next 12 months could be a tough act to follow.

This not financial advice nor a recommendation to invest in the securities listed. The information presented is intended to be of a factual nature only. Past performance and forecasts are not a reliable indicator of future performance. The value of your investments can go down as well as up and you may receive back less than your original investment. The author of this article and other employees of Stakeshop Pty Ltd may hold positions or have financial interests in the company (or companies) discussed above. Stakeshop Pty Ltd does not accept any liability for any decisions you may make if you consider and/or use any of the information contained in this article. As always, do your own research and consider seeking financial, legal and taxation advice before investing. This email is subject to our Disclaimers, Terms and Conditions and Privacy Policy. If you are not the intended recipient of this communication, you are not authorised to read, disclose, reproduce, disseminate or otherwise use this information. While we have taken precautions to ensure that no viruses are present in this email, you should rely on your own virus checking systems and processes. You can contact us at support@hellostake.com.

Kylie Purcell

Senior Markets Commentator

Kylie Purcell is an investments analyst and finance journalist with over a decade of experience covering global markets, investment products and digital assets. Her commentary has been featured in publications including the Australian Financial Review, Yahoo Finance and The Motley Fool. She has a Masters Degree in International Journalism from Cardiff University and a Certificate of Securities and Managed Investments (RG146).