Image: BigstockTaiwan Semiconductor Manufacturing (TSM – Free Report) recently reported robust fourth-quarter 2024 results, wherein it beat estimates for both the top and the bottom lines on surging demand for advanced chips used in AI applications. The Taiwan-based chipmaker also offered a bullish outlook for AI demand.Investors seeking to tap Taiwan Semiconductor’s growth could consider ETFs having the largest allocation to the semiconductor manufacturer. These funds include SP Funds S&P World ex-US ETF (SPWO – Free Report), SP Funds S&P Global Technology ETF (SPTE – Free Report), VanEck Vectors Semiconductor ETF (SMH – Free Report), Matthews Emerging Markets ex China Active ETF (MEMX – Free Report), and Global X Emerging Markets ex-China ETF (EMM – Free Report).Stay up-to-date with all quarterly releases: See the Zacks Earnings Calendar.
Earnings in Focus
Taiwan Semiconductor reported earnings per ADR of $2.24, which outpaced the Zacks Consensus Estimate of $2.16 and improved 57% from the year-ago earnings. Revenues rose 37% year-over-year to $26.9 billion and were above the consensus estimate of $26.38 billion. Taiwan Semiconductor’s high-performance computing division, which encompasses artificial intelligence and 5G applications, drove sales in the fourth quarter, contributing 53% of revenues. Taiwan Semiconductor, which makes chips for companies from Apple (AAPL – Free Report) to NVIDIA (NVDA – Free Report), is benefiting from the global AI boom. Taiwan Semiconductor continues to benefit from the growing adoption of advanced chips for industry-leading 3-nanometer and 5-nanometer technologies. The 5-nanometer wafer accounted for 57% of total revenues, followed by the 3-nanometer wafer at 26% and the 7-nanometer wafer at 14%.Management expects “AI accelerators to be the strongest driver of the high-performance computing platform growth and the largest contributor in terms of overall incremental revenue growth in the next several years.” For the first quarter of 2025, the company expects revenues of $25-$25.8 billion. The Zacks Consensus Estimate is pegged at $23.92 billion. Taiwan Semiconductor also guided 2025 revenue growth in the mid-20s percentage range.
ETFs to Tap
Let’s briefly delve into each ETF below.
SP Funds S&P World ex-US ETF (SPWO – Free Report)
The SP Funds S&P World ex-US ETF tracks the S&P DM Ex-U.S. & EM 50/50 Shariah Index, which is designed to measure the performance of sharia-compliant components of emerging market and developed market stocks, excluding U.S. stocks. It holds a basket of 383 stocks, with Taiwan Semiconductor taking the top spot at 17.5%. The ETF has accumulated $28.7 million in its asset base. The fund charges 55 bps in annual fees, and trades in a lower average trading volume of 11,000 shares. Additionally, the ETF has a Zacks ETF Rank #3 (Hold) rating.
SP Funds S&P Global Technology ETF (SPTE – Free Report)
The SP Funds S&P Global Technology ETF focuses on large and mid-cap technology stocks from around the world, with a specific emphasis on companies pioneering in areas like e-commerce, cloud computing, and healthcare technology. It follows the S&P Global 1200 Shariah Information Technology (Sector) Capped index, and it holds 99 stocks in its basket. Taiwan Semiconductor occupies the top position with a 17% share. The ETF has accumulated $45.1 million in its asset base, and it charges 55 bps in fees per year. It trades in a volume of 12,000 shares a day on average.
VanEck Vectors Semiconductor ETF (SMH – Free Report)
The VanEck Vectors Semiconductor ETF offers exposure to companies involved in semiconductor production and equipment. It follows the MVIS US Listed Semiconductor 25 Index, which tracks the most liquid companies in the industry based on market capitalization and trading volume. The ETF holds 26 stocks in its basket, with Taiwan Semiconductor occupying the second position at 12.6%. The ETF has managed assets worth $23.1 billion, and it charges 35 bps in annual fees and expenses. The ETF trades in an average daily volume of 5 million shares, and it has a Zacks ETF Rank #1 (Strong Buy) rating with a High risk outlook.
Matthews Emerging Markets ex China Active ETF (MEMX – Free Report)
The Matthews Emerging Markets ex China Active ETF seeks alpha in Global Emerging Markets ex China, and it capitalizes on consumption and innovation trends. It holds 67 stocks, with Taiwan Semiconductor being the top firm with a 15.2% share. The ETF has AUM of $37.6 million, and it charges 79 bps in annual fees. It trades in a volume of 3,700 shares a day on average.
Global X Emerging Markets ex-China ETF (EMM – Free Report)
The Global X Emerging Markets ex-China ETF is an actively managed fund seeking to invest in emerging market companies, excluding China, that are believed to achieve or maintain a dominant position within their respective market.As part of its investment strategy, the fund aims to identify early winners in growing industries where entrepreneurship can produce long-term global competitiveness. The ETF holds 71 stocks in its basket, with Taiwan Semiconductor taking the top position at 10.5% share. The ETF has AUM of $24.1 million, and it charges 75 bps in annual fees. It trades in a volume of 3,000 shares a day on average.More By This Author:ETFs In Focus Post UnitedHealth’s Mixed Q4 Results
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