SOXX tracks the ICE Semiconductor Index, which holds about 30 US-listed semiconductor companies and applies weight caps so that no single company dominates the portfolio. Holdings span chip designers, manufacturers and equipment makers, and include companies such as NVIDIA, Broadcom, AMD, Qualcomm, Texas Instruments, Applied Materials and Lam Research. Compared with SMH, which has larger weights in its top holdings, SOXX is more evenly spread, so the two funds can diverge when the largest companies strongly outperform or underperform the rest of the sector. Both funds track the same industry and are exposed to the same cycles in AI, data center and consumer electronics demand. Semiconductors are cyclical, so the fund can have large drawdowns.
