ETFs in Focus on New Intel Investments in Europe
Intel INTC recently announced a slew of deals that will increase its presence in Germany, Poland and Israel. This is in sync with the U.S. chipmaker’s plans to expand in Europe, according to Reuters, Intel will invest around $33 billion in Germany, to develop two chip making plants, making it the largest foreign investment in Germany.
According to the Reuter’s article, the semiconductor manufacturing industry is anticipated to soar into a trillion-dollar global sector by 2030, surpassing its 2021 value of $600 billion. In light of this, we present a selection of ETFs that can offer you exposure to Intel and the industry's potential growth. These include First Trust Nasdaq Semiconductor ETF FTXL, QRAFT AI-Enhanced US Next Value ETF NVQ, First Trust NASDAQ Technology Dividend Index Fund TDIV and Invesco S&P Ultra Dividend Revenue ETF RDIV.
Let’s Dive Into the Deal
Berlin reached an agreement to provide subsidies worth nearly 10 billion euros to Intel. This exceeds the initial offer of 6.8 billion euros and is intended to support the construction of two state-of-the-art facilities in the eastern city.
Intel's investment plans have undergone a significant expansion, with the initial investment of 17 billion euros for the Magdeburg plant, in Germany, almost doubling to over 30 billion euros. The chipmaker has been strategically investing billions in constructing factories across multiple continents, aiming to regain its dominance in chipmaking and be more competitive.
The recent German deal marks Intel's third major investment in just four days. Apart from the Magdeburg project, Intel unveiled plans for a $4.6 billion chip plant in Poland, an EU member, on Friday. Additionally, Israel announced on Sunday that Intel would be allocating $25 billion towards a factory there.
In an effort to attract tech companies and address concerns over supply chain vulnerability and reliance on South Korea and Taiwan for chips, the German government is actively investing billions of euros in subsidies. This move reflects a growing recognition of the importance of securing local chip production capabilities.
Poland Deal
According to an article on Reuters, Intel will invest around $4.6 billion in a new semiconductor assembly and test facility near Wroclaw, Poland. This forms part of Intel's larger investment drive across Europe to expand chip capacity. The facility is expected to employ 2,000 workers initially, with additional jobs created during construction and by suppliers.
Pending European Commission approval, design and planning will commence, and the facility is projected to be operational by 2027.
Israel Deal
Per Reuters, Intel announced a ground breaking investment of $25 billion in a new factory located in Israel. This is considered the largest-ever international investment in the country, as stated by the prime minister of Israel, Benjamin Netanyahu. The factory, set to open in 2027 and operate until at least 2035, will generate employment for thousands of individuals.
During almost five decades of operations in Israel, Intel has grown to become the country's largest privately held employer and exporter and a leader of the local electronics and information industry, according to the company's website.
ETFs in Focus
First Trust Nasdaq Semiconductor ETF (FTXL)
The First Trust Nasdaq Semiconductor ETF seeks to track the performance of the Nasdaq US Smart Semiconductor Index, which provides exposure to US companies within the semiconductor industry. The fund has a basket of 31 securities and an asset base of $1.15 billion. FTXL charges an annual fee of 0.60%.
The fund has a major tilt toward the semiconductor industry, with 79.32% of the assets, and 9.83% exposure in Intel. First Trust Nasdaq Semiconductor ETF has a Zacks ETF Rank #3 (Hold). The fund has generated 34.92% over the past year and 13.22% in the last three months.
QRAFT AI-Enhanced US Next Value ETF (NVQ)
Employing an active strategy, QRAFT AI-Enhanced US Next Value ETF has a basket of 101 securities. The fund has gathered an asset base of $4.67 million and charges an annual fee of 0.75%.
With 8.55% exposure to Intel, the fund has major allocations to distributions services (12.97%), electronic technology (12.94%) and energy minerals (12.17%). QRAFT AI-Enhanced US Next Value ETF has generated 8.04% over the past year and 4.22% in the last three months.
First Trust NASDAQ Technology Dividend Index Fund (TDIV)
The First Trust NASDAQ Technology Dividend ETF seeks track the performance of the NASDAQ Technology Dividend Index. The fund has a basket of 93 securities and has an asset base of $1.98 billion. TDIV charges an annual fee of 0.50%.
First Trust NASDAQ Technology Dividend ETF has 8.63% exposure to Intel and major allocations to semiconductor and equipment (36.97%), software (15.33%) and technology hardware and peripherals (13.07%). It has generated 22.72% over the past year and 14.81% in the last three months.
Invesco S&P Ultra Dividend Revenue ETF (RDIV)
The Invesco S&P Ultra Dividend Revenue ETF seeks to track the performance of the S&P 900 Dividend Revenue-Weighted Index. Having a basket of 60 securities and an asset base of $792.14 million, the fund charges an annual fee of 0.39%.
With 6.14% exposure to Intel, the fund has allocations to finance (34.78%), retail trade (11.15%) and process industries (8.32%). RDIV has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook. Invesco S&P Ultra Dividend Revenue ETF has generated 5.85% over the past year and 1.23% in the last three months. The fund also has a dividend yield of 3.92%, turning out as a good option for dividend income.
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Intel Corporation (INTC) : Free Stock Analysis Report
First Trust NASDAQ Technology Dividend ETF (TDIV): ETF Research Reports
Invesco S&P Ultra Dividend Revenue ETF (RDIV): ETF Research Reports
First Trust NASDAQ Semiconductor ETF (FTXL): ETF Research Reports
QRAFT AI-Enhanced U.S. Next Value ETF (NVQ): ETF Research Reports
