Vishay's 300% Breakout Just Put The Spotlight On An Overlooked Corner Of Semiconductor ETFs

Investors chasing semiconductor-sector gains have spent the past two years focused on artificial intelligence giants such as Nvidia Corp (NASDAQ:NVDA) and Broadcom, Inc (NASDAQ:AVGO). But a 300% year-to-date rally in Vishay Intertechnology Inc (NYSE:VSH) suggests a different corner of the chip market may be emerging as an ETF opportunity.

Shares of the discrete semiconductor and power electronics manufacturer surged nearly 14% on Tuesday morning after the company reported first-quarter revenue of $839.2 million, topping analyst expectations. Vishay also returned to profitability with earnings per share of $0.05, beating consensus estimates, while management guided second-quarter revenue above Wall Street forecasts.

The results helped push the stock to a fresh all-time high above $66, extending a remarkable run that has lifted its market capitalization to roughly $8.7 billion. The stock lost the morning momentum and is down around 3% as of 12.30 pm, EST, Tuesday. Still, the stock is up significantly this year and is worthy of a spot in the limelight.

While Vishay itself remains a relatively small holding in most semiconductor funds, its rally highlights a broader trend: gains are beginning to spread beyond AI infrastructure leaders and into companies tied to electric vehicles, industrial automation, renewable energy systems and power management technologies.

That shift could favor more diversified semiconductor ETFs over funds heavily concentrated in a handful of mega-cap names.

Equal-Weight Funds May Benefit

Market-cap-weighted semiconductor ETFs such as the iShares Semiconductor ETF (NASDAQ:SOXX) and VanEck Semiconductor ETF (NASDAQ:SMH) remain dominated by large positions in Nvidia, Broadcom and Taiwan Semiconductor Manufacturing (NYSE:TSM).

By contrast, equal-weight or modified-equal-weight funds such as the SPDR S&P Semiconductor ETF (NYSE:XSD) provide greater exposure to mid-cap and smaller semiconductor companies, allowing investors to participate more directly when stocks like Vishay outperform.

The company’s recent momentum has been fueled by improving semiconductor demand, a book-to-bill ratio of 1.34, and a series of new automotive-focused products, including power modules for EV traction inverters and automotive-grade protection devices.

Small-Cap ETFs Offer Another Way To Play The Trend

Vishay’s surge is also drawing attention to a handful of small-cap ETFs that have exposure to value-oriented and technology-focused companies benefiting from improving semiconductor demand.

Among them are the Invesco S&P SmallCap Value with Momentum ETF (NYSE:XSVM), which combines value and momentum factors within the small-cap universe, the Invesco S&P SmallCap Information Technology ETF (NASDAQ:PSCT), which targets smaller technology companies, and the Franklin Small Cap Enhanced ETF (NYSE:FSML), an actively managed fund that seeks to enhance returns through quantitative stock selection.

Unlike large semiconductor ETFs dominated by mega-cap AI names, these funds can offer greater exposure to smaller companies benefiting from cyclical recoveries and improving fundamentals. As investors look for semiconductor winners beyond the industry’s largest players, funds such as XSVM, PSCT and FSML could provide indirect exposure to stocks like Vishay that are participating in the broader rebound in industrial, automotive and power-management semiconductors.

This trend may become increasingly relevant if market leadership continues to broaden beyond AI infrastructure and into smaller semiconductor and electronics suppliers serving electric vehicles, renewable energy and industrial automation markets.

A Broader Semiconductor Rally?

For ETF investors, the bigger story may be market breadth.

Vishay’s turnaround comes as investors look beyond AI servers and data centers toward the next phase of semiconductor demand growth. If spending on EVs, industrial equipment and energy infrastructure continues to improve, semiconductor ETFs with broader exposure across analog, power and industrial chipmakers could benefit alongside the industry’s largest names.

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