Monty Rakusen
The SMH ETF had stronger performance in Q1 – Review the top contributors and detractors and updated holdings data.
SMH Performance Overview for Q1 2024
VanEck Semiconductor ETF has had a strong performance in Q1 of 2024 versus the prior quarter, up 28.9%. Performance was positive for most of the portfolio, with exposure to NVIDIA Corp. (NVDA) being the largest positive contributor over the quarter. Semiconductors continue to be a primary driver of technological innovation globally, whether it’s complex systems on a chip or basic memory and components; we believe the sector is a long-term trend that investors should consider.
Daily holdings as of 3/29/24
| Name | Ticker | Portfolio Weighting % | Position Market Value | Shares |
| NVIDIA Corp | NVDA | 20.55 | 3,780,677,559 | 4,184,202 |
| Taiwan Semiconductor Manufacturing Co Ltd ADR | TSM | 11.86 | 2,182,101,052 | 16,038,964 |
| Broadcom Inc | AVGO | 7.69 | 1,414,490,806 | 1,067,210 |
| ASML Holding NV ADR | ASML | 4.88 | 896,926,813 | 924,219 |
| Texas Instruments Inc | TXN | 4.60 | 846,429,598 | 4,858,674 |
| Qualcomm Inc | QCOM | 4.58 | 842,077,376 | 4,973,877 |
| Intel Corp | INTC | 4.50 | 828,682,690 | 18,761,211 |
| Lam Research Corp | LRCX | 4.49 | 826,317,370 | 850,497 |
| Micron Technology Inc | MU | 4.41 | 811,880,019 | 6,886,759 |
| Applied Materials Inc | AMAT | 4.41 | 811,682,715 | 3,935,813 |
| Advanced Micro Devices Inc | AMD | 4.32 | 795,076,679 | 4,405,101 |
| Analog Devices Inc | ADI | 3.59 | 659,592,465 | 3,334,812 |
| KLA Corp | KLAC | 3.45 | 635,282,352 | 909,404 |
| Synopsys Inc | SNPS | 3.22 | 593,309,012 | 1,038,161 |
| Cadence Design Systems Inc | CDNS | 2.99 | 549,266,945 | 1,764,543 |
| NXP Semiconductors NV | NXPI | 2.01 | 370,674,822 | 1,496,044 |
| Marvell Technology Inc | MRVL | 1.75 | 322,695,022 | 4,552,695 |
| Microchip Technology Inc | MCHP | 1.69 | 310,287,244 | 3,458,781 |
| STMicroelectronics NV ADR | STM | 1.25 | 229,676,957 | 5,311,678 |
| Monolithic Power Systems Inc | MPWR | 1.02 | 186,961,146 | 275,990 |
| ON Semiconductor Corp | ON | 0.91 | 168,065,648 | 2,285,053 |
| Skyworks Solutions Inc | SWKS | 0.61 | 112,493,028 | 1,038,525 |
| Teradyne Inc | TER | 0.54 | 99,354,939 | 880,572 |
| Qorvo Inc | QRVO | 0.39 | 70,962,184 | 617,976 |
| Universal Display Corp | OLED | 0.29 | 53,005,825 | 314,668 |
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Source: VanEck. SMH holdings as of 3/29/2024. Holdings may vary. Please visit vaneck.com/SMH for most recent fund holdings. |
SMH Top Holdings
Top two contributors for SMH in Q1 2024
NVIDIA Corp. – 20.54% Weight | 16.35% Contribution to return
In Q1 2024, NVIDIA reported earnings per share (EPS) of $5.98, a significant increase of 629% from the previous year. The company achieved a record total revenue of $26.0 billion, up 262% year-over-year and 18% from the previous quarter. This impressive growth was driven primarily by the Data Center sector, which posted a record revenue of $22.6 billion, a 427% increase from the previous year. The Gaming sector also contributed with revenue of $2.6 billion, marking an 18% increase year-over-year despite an 8% decline from the previous quarter.
Additionally, the Professional Visualization and Automotive sectors reported revenues of $427 million and $329 million, respectively, with the latter showing a notable year-over-year growth of 114%.
Looking ahead, NVIDIA projects revenues of around $11 billion for the next quarter, reflecting continued strong performance across its sectors. CEO Jensen Huang highlighted the company’s focus on accelerated computing and generative AI as key drivers of future growth, aligning with current industry trends.
Taiwan Semiconductor Manufacturing Co. (TSM) – 11.86% Weight | 2.92% Contribution to return
In Q1 2024, Taiwan Semiconductor Manufacturing Company (TSMC) reported robust financial performance. The company achieved earnings per share of $1.38, exceeding the analyst consensus estimate of $1.31. TSMC’s revenue for the quarter was $18.87 billion, surpassing expectations of $18.41 billion. This represents a slight improvement over the previous year’s revenue figures, showcasing steady growth despite challenging market conditions.
The strong performance was driven primarily by the advanced technology node production and the increasing demand for high-performance computing and automotive applications. TSMC’s strategic investments in expanding its manufacturing capacity and technological advancements have positioned it well to capitalize on the growing demand for semiconductors globally.
TSMC has provided optimistic guidance for the upcoming quarters, anticipating continued growth across its various business segments. The company remains focused on expanding its technological leadership and addressing the diverse needs of its global customer base.
Top two detractors for SMH in Q1 2024
Intel Corporation (INTC) – 4.50% Weight | -0.80% Contribution to return
In Q1 2024, Intel reported earnings per share of $0.18 on revenue of $12.7 billion, up 9% year-over-year. Despite this, Intel’s performance was below expectations due to a combination of factors, including a gross margin of 45.1%, which was only slightly above guidance, and a significant loss per share on a GAAP basis of $0.09.
Intel’s underperformance can be attributed to continuing struggles in its client computing and data center businesses, which faced intense competition and slower-than-expected recovery in demand. Additionally, high capital expenditures for ongoing technological advancements and strategic investments, such as the Intel Foundry initiative, have weighed heavily on profitability.
Looking ahead, Intel’s guidance for Q2 2024 includes revenue projections between $12.5 billion and $13.5 billion, with a non-GAAP EPS estimate of $0.10, reflecting cautious optimism amidst challenging market conditions.
STMicroelectronics (STM) – 1.25% Weight | -0.26% Contribution to return
In Q1 2024, STMicroelectronics reported net revenues of $3.47 billion and a gross margin of 41.7%, both below expectations. Year-over-year, net revenues decreased by 18.4%, and net income dropped by 50.9% to $513 million. The decline was driven by weaker performance in the Automotive and Industrial sectors despite gains in Personal Electronics.
For Q2 2024, STMicroelectronics projects revenues of $3.2 billion, a 26% year-over-year decline. The full-year revenue outlook has been revised to $14-$15 billion due to challenging market conditions and prolonged inventory corrections in the Industrial sector. Despite these issues, the company maintains its $2.5 billion CapEx plan, focusing on strategic manufacturing initiatives.
Standardized Performance
| Quarter End Returns as of 3/31/2024 | |||||||||
| 1 Yr | 5 Yr | 10 Yr | Since Inception | Inception Date | Expense Ratio (%) | ||||
| VanEck Semiconductor ETF | SMH | NAV | 71.94 | 34.64 | 27.21 | 26.27 | 12/20/2011 | Gross | 0.35 |
| Mkt Price | 72 | 34.64 | 27.21 | 26.24 | Net | 0.35 | |||
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Source: VanEck. VanEck Associates Corporation (the “Adviser”) will pay all expenses of the Fund, except for the fee payment under the investment management agreement, acquired fund fees and expenses, interest expense, offering costs, trading expenses, taxes and extraordinary expenses. Notwithstanding the foregoing, the Adviser has agreed to pay the offering costs until at least February 1, 2025. “Other Expenses” have been restated to reflect current fees. The performance data quoted represents past performance. Past performance is not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Please call 800.826.2333 or visit vaneck.com for performance current to the most recent month ended. The “Net Asset Value” (NAV) of a Fund is determined at the close of each business day, and represents the dollar value of one share of the fund; It is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Investors should not expect to buy or sell shares at NAV. |
Disclosures
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned is unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its other employees.
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