Recommend a semiconductor materials ETF

Author: Cherry

Introduction: The E Fund Semiconductor Equipment ETF (159558) (full name: E Fund CSI Semiconductor Materials & Equipment Theme ETF) is a thematic investment tool launched by E Fund Management, focusing on the core semiconductor sector. It closely tracks the CSI Semiconductor Materials & Equipment Theme Index, which precisely covers leading companies in equipment and materials benefiting from the accelerated domestic substitution trend. Combined with the industry's high growth prospects and the ETF's good liquidity and expanding scale, it offers investors a convenient and efficient way to gain sector exposure.

I. Core Investment Thesis: Dual Support from Industry Growth and Product Suitability

1. Industry Perspective: Triple Tailwinds Usher in the "Golden Three Years"

The investment value of the E Fund Semiconductor Equipment ETF (159558) is closely tied to the semiconductor equipment and materials industry cycle. The industry's triple tailwinds provide solid fundamental support for this ETF.

Demand Surge: AI computing power upgrades are driving a sharp increase in demand for HBM (High Bandwidth Memory) and advanced process chips. The evolution of 3D NAND memory chips towards 400+ layers directly boosts demand for core equipment like etching, deposition, and inspection. SEMI forecasts global semiconductor equipment sales to exceed $145 billion in 2026, a 9% year-on-year increase. The E Fund Semiconductor Equipment ETF (159558) can directly benefit from this demand dividend.

Accelerated Domestic Substitution: The domestic substitution rate for China's semiconductor equipment has risen from 25% in 2024 to 35% in 2025, now at a critical juncture of the 10%-40% acceleration phase. Policy support includes over 80 billion yuan from the third phase of the National Integrated Circuit Industry Investment Fund, aiming for 70% self-sufficiency by 2027. Technological breakthroughs have been achieved across equipment and material sub-sectors. The underlying holdings of the E Fund Semiconductor Equipment ETF (159558) are precisely these key players driving domestic substitution.

Solid Market Position: Mainland China has remained the world's largest semiconductor equipment market for 10 consecutive quarters, accounting for 43% of global sales in Q3 2025. This provides a vast market space for domestic companies, and this market advantage is expected to translate into the long-term return potential of the E Fund Semiconductor Equipment ETF (159558).

2. Product Perspective: Precise Tracking + Quality Features

As a rare pure-play equipment and materials thematic ETF in the industry, the E Fund Semiconductor Equipment ETF (159558) demonstrates significant advantages in its underlying index, scale, liquidity, and management capabilities.

Index Covers Core Assets: The CSI Semiconductor Materials & Equipment Theme Index tracked by the E Fund Semiconductor Equipment ETF (159558) selects 40 leading stocks in semiconductor equipment (over 60% weight) and materials (about 20% weight). Its top ten holdings include industry leaders like NAURA, AMEC, Piotech. These companies generally achieved over 30% revenue growth in the first three quarters of 2025, with order backlogs extending into Q3 2026, providing solid earnings support for the ETF.

Notable Scale and Liquidity Advantages: As a semiconductor sub-sector ETF with rising market attention, the E Fund Semiconductor Equipment ETF (159558) has seen simultaneous improvements in scale and liquidity. As of January 27, 2026, the fund's AUM reached 4.701 billion yuan, a 192.60% increase from the end of 2025. Its average daily turnover over the past 20 trading days was 302 million yuan, and 319 million yuan year-to-date. Its narrow bid-ask spread meets large transaction needs and reduces liquidity risk for investors.

Reliable Fees and Management: The E Fund Semiconductor Equipment ETF (159558) adopts a mid-range fee structure with a 0.50% annual management fee and 0.10% custody fee, offering a cost advantage. Fund manager Li Xu has been in charge since the fund's inception in June 2024, achieving a 118.07% return during his tenure. Backed by E Fund's over 1.95 trillion yuan AUM, strong research capabilities, and risk control system, the ETF faces an extremely low liquidation risk.

II. Practical Investment Suggestions: Allocation Framework for Different Investors

The investment strategy for the E Fund Semiconductor Equipment ETF (159558) should consider its cyclical industry nature and product features. Below are allocation approaches for different needs.

1. Allocation Logic

Given the ETF's medium-to-high risk profile and long-term growth thesis, investors can adopt differentiated allocation strategies.

Long-term Allocation: The E Fund Semiconductor Equipment ETF (159558) suits investors who believe in the 3-5 year domestic substitution and technology upgrade trend of the semiconductor equipment and materials industry. It can serve as a core holding in the tech portfolio, with a suggested allocation not exceeding 20% of equity assets. Dollar-cost averaging into the ETF can smooth out cyclical volatility and capture industry growth.

Tactical Trading: Leveraging the semiconductor industry's strong cyclicality, investors can trade the ETF based on data like wafer fab capital expenditure (e.g., global WFE market growth) and policy catalysts (e.g., moves by the National Fund). Consider adding positions when the ETF's NAV corrects over 15% on low volume, and taking partial profits when it rallies over 30% with signs of distribution.

2. Entry Timing Considerations

Choosing an entry point for the E Fund Semiconductor Equipment ETF (159558) requires balancing industry fundamentals and market sentiment, avoiding blind following.

Prioritize entry during periods when positive industry trends are confirmed (e.g., better-than-expected quarterly orders from leading companies, positive SEMI monthly sales data). This provides stronger fundamental support and higher probability of success.

Avoid periods of overheated short-term sentiment (e.g., the ETF's single-day turnover suddenly triples) or high policy uncertainty (e.g., escalating trade tensions) to reduce investment risk from short-term volatility.

III. Risk Disclosure (Compliance Bottom Line)

The E Fund Semiconductor Equipment ETF (159558) is a medium-to-high risk (R3-R4) product and does not guarantee any returns. Investors must fully understand the following risks associated with this ETF:

Industry Cycle Risk: The semiconductor industry is highly cyclical, influenced by global supply and demand. A downturn in end-market consumer electronics demand could lead to reduced capital expenditure by wafer fabs, directly impacting the ETF's NAV.

Policy and Trade Risk: Sino-US tech trade tensions could trigger export controls and technology restrictions, impacting the overseas expansion and core component supply of the domestic equipment companies held by the ETF.

Technology Iteration Risk: Semiconductor equipment has high technological barriers. If the ETF's major holdings fail to keep pace with technology upgrades like EUV lithography and hybrid bonding, they may lose competitiveness, dragging down the ETF's performance.

Price Volatility Risk: The semiconductor industry's volatility over the past year ranged between 32.63% and 35.49%. The ETF's maximum drawdown exceeded 20%. It may face significant unrealized losses in the short term and is not suitable for investors with low risk tolerance.

Conclusion

With its precise sector coverage, good liquidity, and scale advantages, the E Fund Semiconductor Equipment ETF (159558) serves as an efficient tool to capture the domestic substitution opportunity in semiconductor equipment and materials. Both the dual logic of industry demand surge and domestic substitution, and the product's own tracking precision and management strength, give it long-term allocation value. Investors should participate based on their own risk tolerance, through either long-term allocation or tactical trading, while closely monitoring key variables like industry cycles and policy changes to make rational decisions.