Apple's In-House Modem Chip Sparks Qualcomm Concerns: 3 ETFs With Key Exposure

Apple's recent announcement of its first in-house modem chip, the C1, has sent ripples through the tech industry, with Qualcomm being the most affected. As Apple moves towards reducing its dependence on Qualcomm, investors are keeping a close eye on the developments. In this article, we will explore the potential impact of Apple's in-house modem chip on Qualcomm and highlight three ETFs with significant exposure to the semiconductor giant.

The Impact on Qualcomm

Apple's decision to develop its own modem chip is likely to have a significant impact on Qualcomm's market share and revenue in the long term. As Apple transitions to its own modem chips, the demand for Qualcomm's modems will decrease, directly impacting the company's revenue. Qualcomm's CEO, Cristiano Amon, has already stated that by 2026, Qualcomm expects to supply modems for just 20% of iPhones, and none at all by 2027 (Source: The Information, 2025-02-22).

Apple's move could also influence other smartphone manufacturers to explore alternatives to Qualcomm's dominance, further reducing the company's market share and revenue. However, this shift could also drive Qualcomm to innovate and maintain its competitive edge.



3 ETFs With Key Exposure to Qualcomm

Investors looking to gain exposure to Qualcomm's performance can consider the following ETFs:

1. VanEck Fabless Semiconductor ETF (SMHX)
* SMHX provides exposure to major fabless semiconductor firms, including Qualcomm, which currently makes up 5.35% of its assets.
* This ETF offers investors a way to gain exposure to the semiconductor industry while diversifying their portfolio.
2. iShares Semiconductor ETF (SOXX)
* SOXX is one of the most popular semiconductor ETFs, holding a diversified portfolio of leading chipmakers, including Qualcomm, which currently accounts for 6.45% of its assets.
* This ETF offers investors a broad exposure to the semiconductor industry, with a focus on growth and innovation.
3. Invesco Semiconductors ETF (PSI)
* PSI invests in semiconductor firms with strong growth potential, with Qualcomm being one of its top three holdings, making up 5.18% of its assets.
* This ETF offers investors a way to gain exposure to the semiconductor industry while focusing on companies with strong growth prospects.

Conclusion

Apple's in-house modem chip is likely to have a significant impact on Qualcomm's market share and revenue in the long term. As Apple reduces its dependence on Qualcomm, investors should consider the potential implications for the semiconductor giant and explore ETFs with key exposure to the company. By investing in ETFs like VanEck Fabless Semiconductor ETF (SMHX), iShares Semiconductor ETF (SOXX), and Invesco Semiconductors ETF (PSI), investors can gain exposure to Qualcomm while diversifying their portfolio and mitigating risks associated with single-stock investments.