Semiconductors are the “picks and shovels” of today’s digital economy – powering everything from AI data centres and smartphones to electric vehicles and industrial robots. For Singapore investors, a semiconductor ETF offers a simple way to ride this long-term theme without trying to time individual names like Nvidia, TSMC, or ASML.

This guide explains what a semiconductor ETF is, how various ETFs differ in index methodology, fees and risk, and how they might fit into a Singapore portfolio. We’ll also cover how to choose and buy a semiconductor ETF from Singapore, key risks, and tax considerations. By the end, you should have a grounded view of whether a semiconductor ETF Singapore allocation belongs in your portfolio – and, if so, how to use it sensibly.

Invest in Semiconductor ETFs with Syfe Brokerage

Whether you’re looking at semiconductor ETFs on US markets or HKEX, you can access them all in one place with Syfe Brokerage. Trade US- and HKEX-listed semiconductor ETFs from a single platform, fund in SGD and auto-convert seamlessly when you need to.

What’s more, enjoy unlimited free US trades for the first three months, as well as low commission fee from 0.04% – 0.06% for HKEX. No platform or hidden fees.

Get Started

Table of Content

• What Is a Semiconductor ETF?
• Why Semiconductors Are a Big Deal Now
• The Semiconductor ETF Landscape: Key Options
• Comparing Popular Semiconductor ETFs
• How Semiconductor ETFs Fit in a Singapore Portfolio
• Key Risks of Investing in Semiconductor ETFs
• How to Choose a Semiconductor ETF (Step-by-Step)
• How to Buy a Semiconductor ETF From Singapore
• Quick Takeaways
• Conclusion
• Frequently Asked Questions (FAQs)

What Is a Semiconductor ETF?

A semiconductor ETF is an exchange-traded fund that invests primarily in companies involved in designing, manufacturing, or supplying equipment and materials for semiconductors. Instead of buying a single chip stock, you buy one ETF unit that holds a basket of semiconductor companies – usually including:

• Chip designers (fabless)
• Foundries (manufacturing)
• Equipment makers
• Sometimes related tech and materials firms

Most semiconductor ETFs:

• Track a rules-based index such as the MVIS US Listed Semiconductor 25 Index, NYSE Semiconductor Index, or S&P Semiconductor Select Industry Index.
• Hold roughly 25–50 stocks, depending on the index.
• Trade intraday on US or Hong Kong exchanges like any other share, with tickers such as SMH, SOXX, XSD, 3119, or 3191.

Compared with picking a single stock like Nvidia, a semiconductor ETF lets you:

• Spread risk across multiple companies and sub-segments.
• Reduce the impact of a major company-specific setback (e.g. product issues, export bans).
• Stay focused on the semiconductor theme rather than broad tech.

On the flip side, you give up the chance of a big “home run” from one stock and accept whatever index rules and weights the ETF uses.

Semiconductor ETF vs individual chip stocks

• ETF: Diversified, easier to manage, closer to “average” sector performance
• Single stocks: Higher upside and downside; require stock-picking skill and more monitoring

If you’re a Singaporean investor who wants exposure to this theme but doesn’t live and breathe chip industry news, a broad semiconductor ETF is usually a more practical starting point than trying to pick the next Nvidia on your own.

Why Semiconductors Are a Big Deal Now

Semiconductors used to feel “niche”. Today, they sit at the heart of almost every growth narrative investors care about – AI, cloud, EVs, and more.

Structural growth drivers

Estimates from one major research firm put the global semiconductor market at USD 681 billion in 2024, with projections of more than USD 2.06 trillion by 2032 – implying 14–15% annual growth. Asia-Pacific accounts for just under 51% of revenue, underscoring the region’s importance in the value chain.

Key growth drivers include:

• Artificial Intelligence (AI) – Data centres and AI accelerators need advanced GPUs and custom chips. Companies like Nvidia (design) and TSMC (foundry) are major beneficiaries.
• Cloud & data centres – Ongoing demand for CPUs, networking chips and memory to support cloud computing.
• 5G and connectivity – Base stations, smartphones and IoT devices all rely on increasingly sophisticated chips.
• Automotive & EVs – Modern vehicles use a growing number of chips for safety, infotainment and driver assistance. Research suggests the global automotive semiconductor market is on track to exceed USD 88 billion by 2027.

In short, when you buy a semiconductor ETF for long-term investors, you’re effectively backing the idea that these digital trends will continue to drive chip demand.

Cyclicality and booms/busts

Despite the strong long-term picture, the semiconductor industry is highly cyclical:

• Strong demand → capacity build-out.
• Oversupply → price and margin pressure.
• Inventories clear → next upcycle begins.

In 2022, many chip stocks corrected sharply as pandemic-era demand and valuations normalised. By 2023, however, leading semiconductor ETFs such as SMH and SOXX delivered calendar-year total returns of about 70% and 67% respectively, significantly outpacing broad equity indices.

That combination of structural growth + cyclical swings is why semiconductor ETFs can be powerful long-term holdings—but also why allocation size and time horizon matter a lot, especially for Singapore investors who may be tempted by recent performance headlines.

The Semiconductor ETF Landscape: Key Options

There is no single “best semiconductor ETF” for everyone. Different funds vary in index design, regional focus, concentration and fees. For a Singapore investor, the right choice depends on whether you want global leaders, an Asia tilt, or more specialised exposure.

Major US-listed semiconductor ETFs

Some of the most widely cited, liquid US-listed semiconductor ETFs include:

• VanEck Semiconductor ETF (SMH)
  • Tracks the MVIS US Listed Semiconductor 25 Index, which focuses on 25 of the largest US-listed semiconductor companies.
  • Typically holds around 25–30 names, with meaningful positions in Nvidia, TSMC (ADR), Broadcom and other mega-caps.
  • Designed as a core semiconductor exposure to global chip leaders.
• iShares Semiconductor ETF (SOXX)
  • Tracks the NYSE Semiconductor Index, holding about 30 semiconductor stocks.
  • Focuses on large, established companies, with index rules that cap extreme single-stock weights.
  • Very large and liquid, frequently used as a benchmark semiconductor ETF.
• SPDR S&P Semiconductor ETF (XSD)
  • Tracks the S&P Semiconductor Select Industry Index, an equal-weighted index of US semiconductor stocks.
  • Equal-weighting gives more exposure to mid-cap and smaller players and less reliance on a handful of giants.
  • Behaviour can differ meaningfully from SMH/SOXX, especially when sector leadership broadens.
• Invesco Semiconductors ETF (PSI)
  • Tracks the Dynamic Semiconductor Intellidex Index, which uses a factor-based approach (value, momentum, quality) to select and weight holdings.
  • Can tilt towards certain styles and may diverge markedly from pure cap-weight indices.
• First Trust Nasdaq Semiconductor ETF (FTXL)
  • Follows the Nasdaq U.S. Smart Semiconductor Index, a rules-based strategy that emphasises value and volatility factors within the semiconductor universe.
  • Holds many of the same companies as SMH and SOXX, but the factor overlay changes relative weights and risk.
• Invesco PHLX Semiconductor ETF (SOXQ)
  • Tracks the PHLX Semiconductor Index, a modified market-cap-weighted index of 30 large US-listed semiconductor companies.
  • Known for a low expense ratio of about 0.19%, making it a cost-efficient way to access the classic PHLX benchmark.

For many Singapore investors using international brokers, these US-listed funds are the primary way to get broad semiconductor ETF exposure focused on global leaders.

Asia-focused semiconductor ETFs

If you want a regional tilt toward Asian chipmakers, there are dedicated ETFs listed on the Hong Kong Stock Exchange:

• Global X Asia Semiconductor ETF (3119 HK)
  • Seeks to invest in Asia-Pacific semiconductor companies, tracking the FactSet Asia Semiconductor Index.
  • Offers direct exposure to chip-related firms in markets such as Taiwan and South Korea.
  • Total expense ratio is around 0.68%.
• Global X China Semiconductor ETF (3191 HK)
  • Focuses on Chinese semiconductor companies, including foundries, design houses and equipment suppliers.
  • More of a targeted China semiconductor ETF, with returns linked to China’s policy, funding and equity market sentiment.

These Asia semiconductor ETFs can complement US-focused funds if you want to diversify across the global supply chain or emphasise Asia’s role.

Comparing Popular Semiconductor ETFs

Once you know the main tickers, the next step is understanding how these funds differ in index methodology, concentration, fees, liquidity and performance. This is crucial if you’re searching for the best semiconductor ETF for long-term investors.

Index methodology and concentration

At a high level:

• SMH and SOXX – concentrated mega-cap exposure
  • Hold roughly 25–30 stocks with high weights in Nvidia, TSMC, Broadcom and other large players.
  • Behave like “semiconductor blue-chip baskets”: powerful when mega-caps lead, but more sensitive to sharp re-ratings of those names.
• XSD – equal-weight diversification
  • Uses an equal-weight approach, spreading exposure more evenly across large, mid and smaller semiconductor stocks.
  • Reduces reliance on a few giants and can perform relatively well when sector breadth is strong, but may lag in narrow mega-cap rallies.
• PSI and FTXL – factor-tilted strategies
  • Both apply factor screens (e.g. value, momentum, quality, lower volatility) on top of the semiconductor universe.
  • This can help in some market regimes (e.g. when cheaper or higher-quality names outperform) but underperform when pure growth and mega-caps dominate.
• SOXQ – low-fee core benchmark exposure
  • Tracks the PHLX Semiconductor Index with a 0.19% expense ratio, a lower fee than many peers.
  • Suitable as a low-cost core semiconductor ETF if you’re comfortable with cap-weighted exposure.
• 3119 / 3191 – regional concentration in Asia and China
  • 3119 spreads across Asia-Pacific chipmakers, while 3191 is focused on China’s semiconductor ecosystem.
  • Increase exposure to Asia’s manufacturing capacity and domestic champions, but also add regional and geopolitical risk relative to global funds.

In short:

• SMH / SOXX / SOXQ – good defaults if you want cap-weighted exposure to global leaders.
• XSD – for investors who prefer more balanced, equal-weight exposure.
• PSI / FTXL / 3119 / 3191 – for specific factor or regional views.

Fees, size and liquidity

Most mainstream semiconductor ETFs charge between 0.30% and 0.60% in annual expenses. It’s prudent to check the latest factsheets before investing. 

• SMH: ~0.35%
• SOXX: ~0.34%
• XSD: ~0.35%
• PSI: ~0.56%
• FTXL: ~0.60%
• SOXQ: ~0.19%
• 3119: ~0.68%
• 3191: ~0.68%

Beyond expense ratios, look at:

• Fund size (AUM): SMH and SOXX are multi-billion-dollar funds with long track records and deep liquidity.
• Average daily turnover & bid–ask spread: Larger funds (SMH, SOXX, XSD) typically offer tight spreads, which helps reduce trading costs.

Performance and volatility

Recent performance rankings often show SMH, SOXX, XSD, PSI and FTXL among the stronger performers over 3–5 year windows vs broad market ETFs, driven by AI and high-end chip demand. SOXQ has offered similar sector exposure at a lower fee since its 2021 launch. Asia funds 3119 and 3191 are more tied to Asia/China sentiment and policy.

Key points across all the 8 mentioned ETFs

• High returns have come with high volatility. It’s not unusual to see drawdowns of 40–60% in sector down-cycles, even for diversified funds. Historical performance for SMH and SOXX shows deep declines in 2022 before the strong rebounds in 2023.
• Concentration cuts both ways. Cap-weighted funds like SMH, SOXX and SOXQ can generate exceptional returns when mega-caps rally but lag sharply if markets rotate away from those leaders.
• Equal-weight and factor funds diversify drivers of performance. XSD, PSI and FTXL can sometimes hold up better when mid-caps or cheaper names shine, but may lag during narrow mega-cap surges.
• Regional funds add macro and policy risk. 3119 and 3191 benefit when Asia or China semiconductor themes are in favour but can underperform when geopolitical tensions, regulation or local market weakness hit.

For Singapore investors, the key takeaway is that all of these semiconductor ETFs are high-beta (i.e. they tend to move more than the overall market, both up and down) and cyclical exposures. Historical outperformance does not remove the need for sensible position sizing, multi-year horizons and realistic expectations.

How Semiconductor ETFs Fit in a Singapore Portfolio

For most Singaporeans, a semiconductor ETF should support your broader investment plan, not define it.

Core vs satellite

A common framework is a core–satellite approach:

• Core holdings – Broad global equity ETFs (e.g. world equity, S&P 500, global ex-US) and/or balanced funds.
• Satellite holdings – Thematic ideas such as semiconductor ETFs, other tech sub-sectors, REITs, or factor strategies.

Illustrative (non-prescriptive) ranges that some investors use for semiconductor ETF Singapore allocations:

• Conservative: ~0–5% of total investable assets
• Moderate: ~5–10%
• Aggressive / high conviction: ~10–15%+

Your allocation should reflect:

• Time horizon (multi-year vs speculative trade).
• Comfort with volatility and drawdowns.
• How tech-heavy your existing holdings already are (e.g. Nasdaq-100, US tech or China tech ETFs already contain many chip stocks).

Role in your overall risk profile

Semiconductor ETFs typically have high beta to global equities (meaning they’re more volatile than the overall market) and can amplify your portfolio’s swings both up and down.

Practical tips for Singapore investors:

• Treat semiconductor ETFs as a medium- to long-term allocation (5–10 years), not a 6-month punt.
• Avoid overweighting if you already hold large positions in US tech or China tech ETFs.
• Consider dollar-cost averaging (DCA) to reduce timing risk, especially after big rallies – a common approach among investors building positions in cyclical themes.

Combining semiconductor ETFs with other assets

Common combinations in a Singapore context include:

• Global equity ETF + semiconductor ETF – Adding a 5–10% semiconductor sleeve to broad world equity exposure.
• US equity ETF + Asia semiconductor ETF (3119 HK) – Combining broad US exposure with an Asia semiconductor ETF tilt for regional diversification.
• Semiconductor ETF + SG REITs / cash – Pairing high-growth, high-volatility chips with income-oriented or defensive local assets to balance the ride.

The key is that your semiconductor ETF allocation fits your overall risk tolerance and doesn’t leave you overexposed to a single cyclical industry.

Key Risks of Investing in Semiconductor ETFs

High return potential always comes with meaningful risk. For semiconductor ETFs, the main ones are:

Industry cyclicality

Chip demand is famously boom-and-bust:

• In upcycles, capacity is tight, margins expand and stocks often re-rate.
• In downcycles, inventories swell, prices fall, and capital spending is cut – earnings can compress sharply.

If you buy a semiconductor ETF after a huge rally and the cycle turns, you need to be prepared to sit through potentially steep drawdowns.

Concentration and valuation risk

Many semiconductor ETFs are heavily exposed to a handful of giants:

• SMH, SOXX and SOXQ have double-digit weights in names like Nvidia and substantial weights in TSMC, Broadcom and other leaders.

This means:

• If AI enthusiasm drives valuations far above historical norms, your ETF can be vulnerable to multiple compression, even if earnings are decent.
• Single-stock risks (export controls, competition, management missteps) can significantly affect ETF performance.

Equal-weighted or factor-balanced ETFs like XSD, PSI and FTXL spread risk more widely, but the sector as a whole is still concentrated in a few key players.

Geopolitical and policy risk

Semiconductors sit at the centre of US–China strategic competition. Export controls, subsidies, reshoring and localisation initiatives can reshape supply chains and profitability.

For Singapore investors, this can cut both ways:

• Policy support in the US, Europe and Asia may underpin long-term capex and demand.
• Sudden policy shifts (e.g. tighter export controls) can trigger sharp corrections in specific regions or sub-sectors, particularly for China semiconductor ETFs such as 3191.

Tax considerations (Singapore-specific)

Most semiconductor ETFs that Singapore investors use are:

• US-domiciled, USD-denominated ETFs (e.g. SMH, SOXX, XSD, PSI, FTXL, SOXQ)
• HK-domiciled, HKD-denominated ETFs (e.g. 3119, 3191)

Key tax points:

• Capital gains tax:
  • Singapore generally does not tax capital gains from the sale of shares or ETFs for individual investors, unless IRAS deems you to be trading as a business.
• Dividend withholding tax:
  • US-domiciled ETFs typically face a 30% US withholding tax on dividends for Singapore investors, because Singapore has no tax treaty with the US.
  • Hong Kong does not currently impose dividend withholding tax; however, ETFs investing into China A-shares may still experience tax drag at the underlying level.

For semiconductor ETFs, which tend to have relatively low dividend yields, the dividend tax impact is often modest, but still worth understanding when comparing a US semiconductor ETF vs an Asia or China semiconductor ETF.

How to Choose a Semiconductor ETF (Step-by-Step)

Here’s a practical framework for choosing a semiconductor ETF from Singapore.

Step 1: Clarify your objective and time frame

Ask yourself:

• Am I investing for long-term growth (5+ years) or a shorter-term tactical trade?
• How much volatility can I tolerate without panic-selling?
• How much of my total portfolio can I allocate to this single theme?

Longer time frames and sensible position sizes make semiconductor ETFs much easier to hold.

Step 2: Choose your regional focus

Broad choices:

• Global/US-focused semiconductor ETFs – e.g. SMH, SOXX, XSD, PSI, FTXL, SOXQ. These capture many of the world’s leading chip designers, foundries and equipment makers, especially US-listed names.
• Asia semiconductor ETFs – e.g. Global X Asia Semiconductor ETF (3119 HK) or China semiconductor ETF 3191 HK, if you want to emphasise Asia’s or China’s share of the supply chain.

You can hold one or blend both, depending on how much you want to tilt towards Asia vs global leaders.

Step 3: Compare index construction and holdings

Review:

• Number of holdings – Concentrated vs more diversified.
• Weighting method – Market-cap, equal-weight, or factor-tilted.
• Top 10 holdings and weights – How dominant are Nvidia, TSMC and Broadcom in your chosen ETF?

If you dislike very high concentration in a few mega-caps, an equal-weight or factor strategy might be more comfortable.

Step 4: Check fees, AUM and liquidity

Compare:

• Expense ratio (TER) – Ideally within a reasonable band (~0.30–0.60%), noting outliers like SOXQ at 0.19% and 3119 at 0.68%.
• Fund size / AUM – Larger funds often have tighter spreads and more stable tracking.
• Average daily volume and bid–ask spread – Important if you plan to trade in size or frequently.

Step 5: Consider taxes

• For US-domiciled ETFs, factor in 30% US dividend withholding tax.
• For HK-domiciled ETFs, check the latest fund documents for any withholding and local tax considerations.

Once you’ve shortlisted 2–3 ETFs that fit your objectives, pick one or two that you’re comfortable holding through a full semiconductor cycle.

How to Buy a Semiconductor ETF From Singapore

Step 1 — Open and fund a global brokerage account

Choose a broker that gives you access to US markets and HKEX. Deposit SGD, then convert to USD and HKD inside the app if required. With Syfe Brokerage, it’s even simpler: Syfe’s auto-FX functionality converts your SGD to USD/HKD at order time to complete the trade — no extra manual conversion step required. 

Step 2 — Place your order smartly

Use a limit order so you control the price you pay. For US-listed ETFs, if the share price is high, Syfe Brokerage offers fractional shares trading so you can invest smaller amounts.

Step 3 — Automate your plan

Set up a recurring buy (weekly or monthly) to dollar-cost average. This keeps you consistent and removes the stress of timing the market.

Step 4 — Maintain and rebalance

Review periodically or when allocations drift beyond a band (e.g., ±5%). Rebalancing helps manage risk after big market moves.

Invest in Semiconductor ETFs with Syfe Brokerage

Whether you’re looking at Semiconductor ETFs on US markets or HKEX, you can access them all in one place with Syfe Brokerage. Trade US- and HKEX-listed semiconductor ETFs from a single platform, fund in SGD and auto-convert seamlessly when you need to.

Stay in control of your own decisions with a MAS-regulated service and transparent pricing—so you can build and manage your exposure more easily across markets.

What’s more, enjoy unlimited free US trades for the first three months, as well as low commission fee from 0.04% – 0.06% for HKEX. No platform or hidden fees.

Quick Takeaways

• Semiconductor ETFs hold baskets of chip-related stocks, giving you diversified exposure to a high-growth but cyclical industry.
• The biggest global funds (like SMH, SOXX, XSD, PSI, FTXL, SOXQ) focus on US-listed semiconductor leaders and commonly preferred for their performance and liquidity.
• Asia-focused funds such as Global X Asia Semiconductor ETF (3119 HK) and Global X China Semiconductor ETF (3191 HK) tilt more toward Taiwan, Korea and China semiconductor names.
• For many Singapore investors, semiconductors are a satellite/thematic allocation, often kept around 5–15% of the equity portfolio due to high volatility (not a rule, just a common range).
• Key trade-offs when choosing a semiconductor ETF: index design (concentrated vs equal-weight vs factor), regional focus, fees, liquidity, and Nvidia/TSMC concentration.
• Singapore generally has no capital gains tax, but US-domiciled semiconductor ETFs are subject to 30% US dividend withholding tax, while HK-domiciled ETFs usually avoid foreign dividend WHT at the fund level.

Conclusion

Semiconductors are one of the few industries where long-term structural growth and short-term cyclicality coexist so dramatically. The world is clearly using more chips – in AI, cloud, cars and connectivity – and credible forecasts project the global semiconductor market to reach around USD 2 trillion by 2032.

For Singapore investors, a semiconductor ETF offers a clean, diversified way to participate in this story:

• You don’t need to pick a single winner between Nvidia, TSMC, ASML and others.
• You can choose your regional tilt – global/US, Asia-focused, or blended.
• You can size the allocation to fit your risk tolerance and broader portfolio.

At the same time, the very forces that make semiconductor ETFs exciting also make them risky. They are volatile, cyclical and often concentrated in a handful of big names. Allocating too much, or investing with a short-term mindset, can quickly turn excitement into stress.

A sensible path for many Singaporeans is to:

1. Build a solid diversified core (global equities, bonds, cash).
2. Add a modest semiconductor ETF satellite (perhaps 5–15% of equities, adjusted for your risk profile and existing tech exposure).
3. Use dollar-cost averaging and periodic rebalancing rather than chasing headlines.

Frequently Asked Questions (FAQs)

1. What is the best semiconductor ETF for long-term investors?
There isn’t a single “best semiconductor ETF” for everyone. Many long-term investors favour SMH and SOXX because they are large, liquid and hold leading global chip companies, while XSD appeals to those who prefer equal-weight exposure across more mid-cap names.

Your choice should reflect your regional preference, comfort with concentration, fee sensitivity and tax considerations. Always review the factsheet, index methodology and top holdings before deciding.

2. How do I invest in semiconductor ETFs from Singapore?
Open a brokerage account that offers access to US markets (for SMH, SOXX, XSD, PSI, FTXL, SOXQ) and/or HKEX (for 3119, 3191), like with Syfe Brokerage. Search for your chosen ETF ticker and place a market or limit order. Many investors use dollar-cost averaging into semiconductor ETFs to reduce timing risk instead of investing a large lump sum at once.

3. Are semiconductor ETFs too risky for beginners?
Semiconductor ETFs are riskier than broad market ETFs but generally less risky than picking a single chip stock. They can fall sharply in downturns and are not suitable as your only equity holding.

For beginners, it’s usually better to start with broad global or regional ETFs. Once you’re comfortable with market volatility and have a clear long-term plan, you can add a small semiconductor ETF allocation as a thematic satellite.

4. What are the main risks of semiconductor ETFs?
Key risks include:

• Industry cyclicality – Demand, pricing and earnings can swing widely.
• Concentration – Heavy exposure to a few giants like Nvidia and TSMC.
• Valuation – Semiconductors can become expensive after big rallies, increasing downside risk.
• Geopolitics and regulation – Export controls, subsidies and localisation policies can move the sector, especially for China-focused ETFs.

Understanding these semiconductor ETF risks and sizing your position appropriately is just as important as picking the “right” ticker.

5. How much of my portfolio should I put into semiconductor ETFs?
There is no universal rule, but many Singapore investors treat semiconductor ETFs as a thematic satellite (illustrative):

• Cautious: ~0–5% of total portfolio
• Moderate: ~5–10%
• Aggressive: ~10–15% or more

The right number depends on your risk tolerance, time horizon, and current tech exposure. If you already hold significant Nasdaq-100 or tech ETFs, you may want a smaller dedicated semiconductor ETF allocation to avoid over-concentration.