As demand for semiconductors continues to outpace supply, global semiconductor sales were up $144.8 billion in the third quarter of 2021, which represents a rise of 27.6%, according to the Semiconductor Industry Association (SIA).
Per a Digitimes Asia article, “Semiconductor sales were $48.3 billion in September 2021, rising 27.6% from a year earlier and 2.2% on month. Monthly sales are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.”
“Semiconductor shipments reached all-time highs in the third quarter of 2021, demonstrating both the ongoing high global demand for chips and the industry’s extraordinary efforts to ramp up production to meet that demand,” said John Neuffer, SIA president and CEO. “Sales into the Americas led the way, increasing more than any other regional market both month-to-month and year-to-year.”
A Leveraged Option for Traders
Traders looking for amplified returns with a leveraged ETF in the semiconductor sector can look at the Direxion Daily Semiconductor Bull 3X ETF (SOXL). SOXL 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 securities of the index, ETFs that track the index, and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index. The index measures the performance of domestic companies engaged in the design, distribution, manufacture, and sale of semiconductors.
“This ETF offers 3x daily long leverage to the PHLX Semiconductor Index, making it a powerful tool for investors with a bullish short-term outlook for semiconductor equities,” an ETF Database analysis noted. “Investors should note that SOXL’s leverage resets on a daily basis, which results in compounding of returns when held for multiple periods. SOXL can be a powerful tool for sophisticated investors, but should be avoided by those with a low risk tolerance or a buy-and-hold strategy.”
Momentum is obviously on the side of semiconductors, with SOXL up almost 67% despite market headwinds such as rising yields and inflation fears. If fundamental factors like a chip shortage hold up, SOXL could continue its uptrend through the rest of 2021.
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