Chip Shock: 3 Hot Semiconductor ETFs To Watch As Trump's Tariff Bomb Ticks

Semiconductor ETFs are attracting investor attention this week as the industry finds itself at the focal point of global trade tensions. U.S. President Donald Trump is poised to announce new tariff levels on foreign semiconductors within days, a move that could remake supply chains and spook markets already nervous following recent trade volatility.

While the White House considers the shape of the future chip industry, investors are focusing on ETFs with heavy exposure to chipmakers. Whether tariffs fuel more market volatility or offer a buying opportunity largely depends on how the policy plays out over the next few weeks.

Also Read: Chip Stocks Surge As Trump Pauses Tariffs For US Allies, Targets China With 125% Duties

3 Semiconductor ETFs To Watch Amid Tariff Headlines

iShares Semiconductor ETF (NASDAQ:SOXX)

One of the sector’s most liquid and best-followed funds, SOXX provides exposure to U.S.-listed behemoths such as Nvidia (NASDAQ:NVDA), Intel (NASDAQ:INTC), and Broadcom (NASDAQ:AVGO). As it is based on global manufacturing and cross-border supply chains, SOXX may be vulnerable to import tariffs and higher component prices.

VanEck Semiconductor ETF (NASDAQ:SMH)

SMH is distinguished by its international makeup, featuring giants such as Taiwan Semiconductor Manufacturing (NYSE:TSM) and ASML Holding (NASDAQ:ASML). Taiwan’s tariff talks with the U.S. will be important here, particularly if the island achieves exemptions that may protect SMH’s non-U.S. holdings from policy jolts.

SPDR S&P Semiconductor ETF (NYSE:XSD)

An equally weighted ETF, XSD leans slightly more toward small and mid-cap chipmakers such as ON Semiconductor (NASDAQ:ON) and some large-cap ones like Texas Instruments Inc (NASDAQ:TXN). It may provide a hedge against large-cap concentration risk if giants like Nvidia or TSMC are subject to tariff pressure.

The Policy Backdrop: Tariffs, Taiwan And Tech

Trump’s planned action is part of a larger national security investigation into the electronics supply chain, unveiled over the weekend. Whereas smartphones and laptops had previously been spared recent retaliatory tariffs on China, officials now indicate that advanced technology products—such as semiconductors, personal electronics, and medicines—will soon bear standalone duties, as reported by Reuters.

On Sunday, Trump said that the White House wants to simplify the chip market from many other companies and aims to produce chips in the U.S., adding that some companies might be allowed flexibility in implementation. He said new tariff levels on foreign semiconductors will be announced this week.

Commerce Secretary Howard Lutnick confirmed that a “special focus-type of tariff” on fundamental tech imports will be introduced over the next two months. The standalone regime would operate in parallel to reciprocal tariffs, which, according to Reuters, rose to 125% on Chinese imports last week.

The uncertainty has unsettled markets. The S&P 500 has fallen over 10% since Trump’s Jan. 20 inauguration, and the chip sector has experienced some of the deepest intraday plunges in months.

Simultaneously, Taiwan, which plays a vital role in the world chip community, has been positively negotiating with Washington to avoid getting engulfed in the tariff wave. President Lai Ching-te affirmed that the initial dialogue has been “smooth,” and Taipei is looking to turn the crisis into a silver lining as far as deep trade integration with Washington is concerned, as per another Reuters report. TSMC’s latest promise of further investing $100 billion in America complements such a strategy.

While the world holds its breath for what Trump will do next, investors in semiconductor ETFs are keeping a close watch. Whether the result produces tariff clarity or more turbulence, the industry is at the crossroads of geopolitics, policy and market performance.

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