Key Points
The iShares Semiconductor ETF (NASDAQ: SOXX) rose 12.6% in June, according to data from S&P Global Market Intelligence. The performance marks another strong month for the semiconductor sector (the ETF aims to track the NYSE Semiconductor Index) and, despite a dip in July, it’s up 88% in 2026 as of the time of writing.
Semiconductor sector in June
The NYSE Semiconductor Index, and therefore the ETF, consists of modified float-adjusted market-cap-weighted holdings of the 30 largest U.S.-listed semiconductor companies. In practice, the top five companies are capped at 8% of the index, rebalanced at the end of the quarter, and the weight of the others is capped at 4%.
These weightings mean the ETF has exposure to a broad range of semiconductor stocks, rather than being heavily weighted to Nvidia despite its $4.7 trillion market cap. In fact, as of July 2, the rise of Micron Technology and Advanced Micro Devices meant the two represented slightly more than 8% of the ETF, with Nvidia at 7.5%. Intel is the fifth-largest position, representing about 6.2%.
The broad-based exposure helps explain how the ETF captured some of the explosive performance of semiconductor capital-spending plays like Applied Materials and KLA Corp in the month, as well as strong performances from Intel and Micron, balanced by declines in Nvidia and Broadcom.
Intel, semiconductor capital spending, and Micron Technology
The strength in the semiconductor industry in June was nuanced, with three investment themes dominating. First, the need for AI chips and the concomitant capital spending required to make them drove capital equipment stocks higher. Second, President Trump claimed Intel and Apple had agreed to develop and manufacture chips in the U.S., and although neither party has confirmed the deal yet, it was enough to help lift Intel’s stock.
Third, Micron Technology’s blockbuster third-quarter earnings report confirmed exceptionally strong demand conditions in memory chips, and management acknowledged that “broadly speaking, the overall aggregate supply is substantially below the aggregate demand for both DRAM and NAND. Of course, DRAM is extremely, extremely constrained. HBM is very constrained. All the segments are seeing those challenges,” on the earnings call.
The conditions characterize the industry even as Micron confirmed it would increase its fiscal capital spending to $27 billion in its fiscal 2026 (from $15.9 billion in 2025) and management said, “We’re also going to increase substantially capex next year,” with Wall Street analysts penciling in $44 billion according to S&P Global Market Intelligence.
What it means for semiconductor investors
June’s events highlight ongoing themes within the semiconductor industry that investors can seek to gain specific exposure to. Alternatively, they can buy an ETF like the iShares offering, secure in the knowledge that they will capture at least some of the upside from these developments.
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Applied Materials, Intel, KLA, Micron Technology, Nvidia, and iShares Trust-iShares Semiconductor ETF. The Motley Fool has a disclosure policy.
