Which ETF has more TSMC and ASML exposure, SMH or SOXX?

SMH typically has much higher exposure to foreign-listed companies like TSMC and ASML, which dominate the manufacturing equipment space, making it a more pure-play manufacturing supply chain ETF.

Is SMH or SOXX better for long-term investors?

Both are excellent, but SMH is often preferred by aggressive investors for its higher concentration in market leaders (Nvidia, TSMC). SOXX offers a slightly broader and more diversified approach.

SMH vs SOXX: The Semiconductor ETF Showdown

Semiconductors are the bedrock of the modern economy—they power everything from AI to smartphones. For investors looking for focused exposure beyond the general Technology Sector, **SMH (VanEck Semiconductor ETF)** and **SOXX (iShares Semiconductor ETF)** are the two essential vehicles.

These funds are not interchangeable. They differ significantly in their exposure to global leaders like TSMC and ASML. This manual breaks down the core differences to help you decide which one best captures the AI chip boom.

Side-by-side comparison of Top 5 Holdings (Nvidia, ASML, TSMC) for SMH vs SOXX, highlighting weight differences.

📘 Sector Investing: Review the 3-Fund Portfolio Base

SMH: The Concentrated Leader (VanEck)

SMH tracks the MVIS US Listed Semiconductor 25 Index. As the name implies, it is highly concentrated, holding only about 25 of the largest and most liquid semiconductor firms.
The Key Feature: SMH has high exposure to non-US listed companies (via ADRs) like TSMC and ASML, which are critical to the global supply chain. This concentration means higher volatility but potential for higher gains when market leaders perform well.

SOXX: The Broad Player (iShares)

SOXX tracks the ICE Semiconductor Index. It holds about 30-40 companies.
The Key Feature: SOXX historically has lower exposure to the massive foreign-listed companies (TSMC/ASML) than SMH, focusing more on US-listed design and manufacturing firms. It is slightly more diversified and often considered the smoother ride.

Line graph comparing the 5-year total return of SMH vs SOXX, showing SMH with generally higher performance.

Comparison Matrix (SMH vs SOXX)

Choose your exposure type carefully.

Feature	SMH (VanEck)	SOXX (iShares)
Number of Holdings	~25 (Highly Concentrated)	~35 (Broader)
Expense Ratio	0.35%	0.43% (Higher Cost)
TSMC/ASML Exposure	Significantly Higher	Lower
Verdict	For Aggressive AI/Chip Bets	For Safer, Broader Exposure

The Verdict: SMH for Pure Global Exposure

Scenario A: You are bullish on the global supply chain (TSMC/ASML) → Choose SMH

If you believe the future of chips depends on the dominant manufacturing and equipment companies, **SMH** is the superior play due to its higher weighting in these foreign-listed giants.

Scenario B: You want slightly lower volatility → Choose SOXX

While the differences are slight, **SOXX** offers a less concentrated portfolio and is also slightly cheaper than the Nasdaq 100 option. It's a great option if you need exposure without high concentration risk.

🔍 Deep Dive: XLK vs VGT (General Tech Sector Comparison)

Conclusion: SMH is the Current Market Favorite

While SOXX is a solid choice, **SMH** has often offered slightly higher returns due to its aggressive weighting of current market leaders like Nvidia and TSMC. For aggressive investors in the AI boom, SMH is the default choice.

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