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Top-Ranked Semiconductor ETFs to Buy as Taiwan-US Agree on $500B Chip Deal
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Key Takeaways
Semiconductor ETFs to gain momentum after U.S.-Taiwan finalize a $500B deal to expand chip fabs on U.S. soil.
SMH offers broad exposure to chipmakers and equipment firms poised to benefit from new U.S. factories.
SOXX and SOXQ provide diversified access to semiconductor leaders amid rising reshoring and fab spending.
On Jan. 15, 2026, the global technology landscape witnessed a strategic pivot with the United States and Taiwan having finalized a historic trade agreement to jointly build chips and chip factories on American soil. As part of the agreement, Taiwanese semiconductor companies will invest at least $250 billion in U.S. chip production capacity, while the island’s government has committed $250 billion in credit guarantees to help smaller supply-chain partners relocate to the United States.
In return, the United States will provide significant tariff relief to Taiwan, capping rates at 15%, down from the reciprocal 20% since President Trump imposed country-specific duties in August last year, and committing to zero reciprocal tariffs on generic pharmaceuticals, their ingredients, aircraft components, and certain natural resources (as cited in CNBC).
This massive industrial policy move, designed to bolster U.S. supply chain security and counter Chinese technological advancement, shines an immediate spotlight on the semiconductor industry. For investors, the deal creates a compelling tailwind, making diversified semiconductor Exchange-Traded Funds (ETFs) a prime vehicle to capitalize on the expected surge in domestic chip manufacturing, equipment and design.
Breaking Down the Deal and Its Direct Beneficiaries
The agreement is a strategic masterstroke aimed at boosting the U.S. semiconductor industry, giving it a competitive edge against the massively rising power of China’s leadership in the chip industry, in exchange for offering tariff relief to Taiwan.
Crucially, the deal should benefit companies building U.S. factories (fabs), allowing them to import large amounts of equipment and materials tariff-free during construction and operation.
Undoubtedly, the clearest and most significant beneficiary of this agreement is Taiwan Semiconductor Manufacturing Company (TSM - Free Report) , with reports indicating that the company has purchased hundreds of acres in Arizona to potentially double its presence to six or more "megafabs."
TSM has already invested up to $40 billion in Arizona fabs with CHIPS Act support, with the company having committed to spend $100 billion in U.S. plants last year. This new deal will provide the company with long-term tariff certainty and a direct incentive to build in the United States, without facing potential tariffs as high as 100%.
Beyond TSM, the deal should benefit the entire ecosystem supporting advanced chip fabrication. This includes:
• Semiconductor Equipment Giants: Companies like Applied Materials (AMAT - Free Report) , ASML Holding (ASML - Free Report) , Lam Research (LRCX) and KLA Corporation (KLAC - Free Report) should witness sustained demand as new fabs are built and tooled.
• American Chip Design Leaders: Major U.S. tech firms, such as Nvidia (NVDA - Free Report) , Microsoft (MSFT - Free Report) , Broadcom (AVGO - Free Report) and Apple (AAPL - Free Report) , which rely on TSMC to manufacture their most advanced chips, stand to benefit from the deal through closer proximity to a key supplier and potentially lower chip import costs.
• Memory Manufacturer: As a major U.S. memory chip manufacturer, Micron Technology’s (MU - Free Report) existing large-scale U.S. investments, such as its fabs in New York and Idaho, align perfectly with the deal's core goal of "reshoring" advanced manufacturing. Furthermore, a stronger U.S. supply chain can boost demand for critical components like memory chips, benefiting Micron.
Semiconductor ETFs at Play
Considering the aforementioned discussion, investors may add individual stocks like TSM or NVDA to benefit from the chip industry boom resulting from the U.S.-Taiwan deal. But individual stock investment carries unique risks.
As the semiconductor industry remains highly volatile and intensely competitive, a company-specific issue — a delay in a fabrication plant, a missed technological node, or a drop in demand for a specific product — can severely affect a single stock, even within a favorable industry trend.
A Semiconductor ETF solves this problem by offering instant, diversified exposure to the entire sector's growth. Rather than attempting to identify which companies will execute best on the $250 billion investment, let us focus on the following ETFs that offer diversified exposure to the broader semiconductor ecosystem, including chipmakers, designers and equipment suppliers. This diversification mitigates company-specific risk while maintaining a pure focus on the industry's powerful macro tailwinds from reshoring, AI and automotive innovation.
This fund, with net assets worth $42.49 billion, offers exposure to 26 companies involved in semiconductor production and equipment. Its top three holdings include NVDA (19.17%), TSM (10.45%) and AVGO (7.68%).
SMH has soared 57.1% over the past year. The fund charges 35 basis points (bps) as fees. It traded at a volume of 9.94 million shares in the last trading session. This fund sports a Zacks ETF Rank #1 (Strong Buy).
This fund, with net assets worth $20.28 billion, offers exposure to 30 U.S. companies that design, manufacture and distribute semiconductors. Its top three holdings include MU (7.39%), NVDA (7.36%) and Advanced Micro Devices (AMD - Free Report) (7.31%).
SOXX has soared 51.9% over the past year. The fund charges 34 bps as fees. It traded at a volume of 6.52 million shares in the last trading session. This fund sports a Zacks ETF Rank #1.
This fund, with a market value worth $921.5 million, offers exposure to the 31 largest U.S.-listed securities of companies engaged in the semiconductor business. Its top three holdings include NVDA (11.29%), AVGO (7.67%) and AMD (7.48%).
SOXQ has rallied 52.7% over the past year. The fund charges 19 bps as fees. It traded at a volume of 0.59 million shares in the last trading session. This fund sports a Zacks ETF Rank #1.
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Top-Ranked Semiconductor ETFs to Buy as Taiwan-US Agree on $500B Chip Deal
Key Takeaways
On Jan. 15, 2026, the global technology landscape witnessed a strategic pivot with the United States and Taiwan having finalized a historic trade agreement to jointly build chips and chip factories on American soil. As part of the agreement, Taiwanese semiconductor companies will invest at least $250 billion in U.S. chip production capacity, while the island’s government has committed $250 billion in credit guarantees to help smaller supply-chain partners relocate to the United States.
In return, the United States will provide significant tariff relief to Taiwan, capping rates at 15%, down from the reciprocal 20% since President Trump imposed country-specific duties in August last year, and committing to zero reciprocal tariffs on generic pharmaceuticals, their ingredients, aircraft components, and certain natural resources (as cited in CNBC).
This massive industrial policy move, designed to bolster U.S. supply chain security and counter Chinese technological advancement, shines an immediate spotlight on the semiconductor industry. For investors, the deal creates a compelling tailwind, making diversified semiconductor Exchange-Traded Funds (ETFs) a prime vehicle to capitalize on the expected surge in domestic chip manufacturing, equipment and design.
Breaking Down the Deal and Its Direct Beneficiaries
The agreement is a strategic masterstroke aimed at boosting the U.S. semiconductor industry, giving it a competitive edge against the massively rising power of China’s leadership in the chip industry, in exchange for offering tariff relief to Taiwan.
Crucially, the deal should benefit companies building U.S. factories (fabs), allowing them to import large amounts of equipment and materials tariff-free during construction and operation.
Undoubtedly, the clearest and most significant beneficiary of this agreement is Taiwan Semiconductor Manufacturing Company (TSM - Free Report) , with reports indicating that the company has purchased hundreds of acres in Arizona to potentially double its presence to six or more "megafabs."
TSM has already invested up to $40 billion in Arizona fabs with CHIPS Act support, with the company having committed to spend $100 billion in U.S. plants last year. This new deal will provide the company with long-term tariff certainty and a direct incentive to build in the United States, without facing potential tariffs as high as 100%.
Beyond TSM, the deal should benefit the entire ecosystem supporting advanced chip fabrication. This includes:
• Semiconductor Equipment Giants: Companies like Applied Materials (AMAT - Free Report) , ASML Holding (ASML - Free Report) , Lam Research (LRCX) and KLA Corporation (KLAC - Free Report) should witness sustained demand as new fabs are built and tooled.
• American Chip Design Leaders: Major U.S. tech firms, such as Nvidia (NVDA - Free Report) , Microsoft (MSFT - Free Report) , Broadcom (AVGO - Free Report) and Apple (AAPL - Free Report) , which rely on TSMC to manufacture their most advanced chips, stand to benefit from the deal through closer proximity to a key supplier and potentially lower chip import costs.
• Memory Manufacturer: As a major U.S. memory chip manufacturer, Micron Technology’s (MU - Free Report) existing large-scale U.S. investments, such as its fabs in New York and Idaho, align perfectly with the deal's core goal of "reshoring" advanced manufacturing. Furthermore, a stronger U.S. supply chain can boost demand for critical components like memory chips, benefiting Micron.
Semiconductor ETFs at Play
Considering the aforementioned discussion, investors may add individual stocks like TSM or NVDA to benefit from the chip industry boom resulting from the U.S.-Taiwan deal. But individual stock investment carries unique risks.
As the semiconductor industry remains highly volatile and intensely competitive, a company-specific issue — a delay in a fabrication plant, a missed technological node, or a drop in demand for a specific product — can severely affect a single stock, even within a favorable industry trend.
A Semiconductor ETF solves this problem by offering instant, diversified exposure to the entire sector's growth. Rather than attempting to identify which companies will execute best on the $250 billion investment, let us focus on the following ETFs that offer diversified exposure to the broader semiconductor ecosystem, including chipmakers, designers and equipment suppliers. This diversification mitigates company-specific risk while maintaining a pure focus on the industry's powerful macro tailwinds from reshoring, AI and automotive innovation.
VanEck Semiconductor ETF (SMH - Free Report)
This fund, with net assets worth $42.49 billion, offers exposure to 26 companies involved in semiconductor production and equipment. Its top three holdings include NVDA (19.17%), TSM (10.45%) and AVGO (7.68%).
SMH has soared 57.1% over the past year. The fund charges 35 basis points (bps) as fees. It traded at a volume of 9.94 million shares in the last trading session. This fund sports a Zacks ETF Rank #1 (Strong Buy).
iShares Semiconductor ETF (SOXX - Free Report)
This fund, with net assets worth $20.28 billion, offers exposure to 30 U.S. companies that design, manufacture and distribute semiconductors. Its top three holdings include MU (7.39%), NVDA (7.36%) and Advanced Micro Devices (AMD - Free Report) (7.31%).
SOXX has soared 51.9% over the past year. The fund charges 34 bps as fees. It traded at a volume of 6.52 million shares in the last trading session. This fund sports a Zacks ETF Rank #1.
Invesco PHLX Semiconductor ETF SOXQ
This fund, with a market value worth $921.5 million, offers exposure to the 31 largest U.S.-listed securities of companies engaged in the semiconductor business. Its top three holdings include NVDA (11.29%), AVGO (7.67%) and AMD (7.48%).
SOXQ has rallied 52.7% over the past year. The fund charges 19 bps as fees. It traded at a volume of 0.59 million shares in the last trading session. This fund sports a Zacks ETF Rank #1.