Semiconductor companies and ETFs keep rolling
When you look at the feedback from last week using ETF filter of the ETF database tool, it is evident that semiconductors continue to roll with leveraged funds like the Direxion Daily Semiconductor Bull 3X ETF (SOXL).
Strong demand from automakers and low supply have provided the perfect catalysts for chip prices. As the world continues to rely heavily on technology, semiconductors will need to continue to meet computing power needs.
Billings from North American semiconductor production equipment manufacturers topped US $ 3 billion for the fourth consecutive month in April 2021, also marking the fifth consecutive month of sequential increases, according to SEMI ,” at DigiTimes Asia article Noted. SEMI is a trade organization for the semiconductor industry.
Enter SOXL, which seeks daily investment results equal to 300% of the daily performance of the PHLX Semiconductor Sector Index. The fund, under normal circumstances, invests at least 80% of its net assets in financial instruments, such as swap agreements, and index securities, ETFs that track the index and other financial instruments. which provide daily leveraged exposure to the index or ETFs. that follow the index.
The index measures the performance of domestic companies engaged in the design, distribution, manufacture and sale of semiconductors.
Steady growth of semiconductors
US President Joe Biden’s $ 2 trillion infrastructure plan includes initiatives to strengthen the semiconductor industry. In the meantime, billing continues to rise, which should only increase the income of the chip companies.
“Semiconductor equipment manufacturers based in North America posted US $ 3.41 billion in invoices worldwide in April 2021 (three-month average), SEMI revealed,” the DigiTimes article said. Asia. “Billings are 4.1% above the revised March billing level of US $ 3.27 billion and 49.5% above the April 2020 billing level of US $ 2.28 billion. U.S. dollars.”
At the height of the pandemic, many manufacturing plants were closed, but as the economy begins to come back to life, resumption of operations means a need for chips.
“Equipment manufacturers continue to experience steady growth as the industry strives to meet the growing demand for semiconductors across a wide range of end-market segments,” said Ajit Manocha, president and chief executive officer. of the management of SEMI.
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