SMH - China's restrictions on Micron put semiconductor ETFs in the spotlight

2023-05-22 14:27:55 ET

Exchange traded funds focused on the semiconductor sector were in the spotlight Monday amid indications that a chip war between China and the United States is heating up once again.

Over the weekend, Beijing announced the ban of chip maker Micron Technologies ( NASDAQ: MU ) from its most sensitive infrastructure projects. This came as China worried that products made by US-based MU represented a national security risk.

Shares of the Boise, Idaho-headquartered firm dropped 3% in Monday's intraday action, sliding to near the $66 level. Many investors are now worried about the longer-term effects MU will face along with other chip names that are also involved with China.

As a result to the latest news, exchange traded funds that offer exposure to the semiconductor market have come under microscope. More specifically, the 257 ETFs that have positions in MU are being closely watched.

Here are the five ETFs with the heaviest allocations towards Micron Technologies (listed with MU's weighting within the fund):

• First Trust Nasdaq Semiconductor ETF ( FTXL ) at 8.79%.
• Invesco Dynamic Semiconductors ETF ( PSI ) at 5.58%.
• Strive U.S. Semiconductor ETF ( SHOC ) at 4.63%.
• VanEck Semiconductor ETF ( SMH ) at 4.48%.
• iShares Semiconductor ETF ( SOXX ) at 4.30%.

More on the China Tech War

• Who's next? Micron stock drops after being swept up into the war over silicon
• Chinese probe into Micron seen as 'major concern,' US lobbying group says
• Montana to become the first U.S. state to ban TikTok

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