Semiconductor Investors Rotated Toward Equipment Makers
Capital shifted from chip designer-heavy funds into diversified equipment names as fab spending projections grow.
Updated on Sept. 25, 2026 in Semiconductors
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Investors moved capital from Nvidia-concentrated ETFs into equal-weight semiconductor funds on September 22 and 23, 2026. This rotation drove stock gains for major equipment manufacturers as market focus shifted toward the broader supply chain.
Why it matters
Investors are seeking to mitigate concentration risk by gaining exposure to the infrastructure required for global semiconductor fabrication. This shift reflects a strategic move to capture revenue from capacity expansion rather than relying solely on individual chip winners.
The Invesco Dynamic Semiconductors ETF (PSI) has outperformed the VanEck Semiconductor ETF (SMH) by more than 20 percentage points over the trailing year. While SMH returned approximately 88% with a 20% allocation to Nvidia, equal-weight funds capping Nvidia at under 4% returned over 100%.
The players
Tokyo Electron
A global leader in semiconductor production equipment used to create complex chip architectures.
Advantest
A manufacturer of automatic test equipment essential for verifying the performance of semiconductor devices.
Lasertec
A specialized provider of inspection systems required for extreme ultraviolet lithography processes.
Invesco Dynamic Semiconductors ETF
An investment fund designed to track a broader, more equally weighted index of semiconductor companies.
VanEck Semiconductor ETF
A market-cap-weighted investment fund that maintains a significant concentration in major chip designers.
The details
Equipment manufacturers generate revenue by selling tools to semiconductor foundries, which are the factories that physically build chips. These firms provide the specialized hardware—such as lithography and inspection machines—necessary for 300mm fab equipment spending, a sector projected to climb 18% to $133 billion in 2026. This equipment is essential for capacity building in major manufacturing regions like Taiwan, Korea, and China, regardless of which specific company designs the final chip.
Timeline
2023: Export controls on China were imposed.
September 22-23, 2026: Investors rotated capital and equipment maker stocks gained.
2026: Projected record equipment sales of up to $145 billion.
2027: Projected equipment sales of $156 billion.
The Tech Race
This capital rotation follows the pattern of supply chain fragmentation initiated by the 2023 export controls on China, which necessitated localized global fab expansion. Equipment makers now sit at the center of a race to build capacity that transcends individual chip designer performance.
This shift indicates that investors and industry analysts are prioritizing infrastructure providers over individual software-defined chip designers. Market watchers should monitor whether these equipment-heavy funds maintain their outperformance as global fab spending approaches a projected $145 billion in 2026.
The takeaway
The move suggests a broadening of market interest from high-profile chip designers to the hardware manufacturers that enable all silicon production. Monitor upcoming quarterly equipment sales figures for 2026 to see if the sector hits the $145 billion benchmark.
Further reading
For broader trends in the industry, see our coverage on Semiconductors.
Source note: This article includes information reported by Startup Fortune.
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