AI demand powers semiconductor funds to 3 new highs in 2026

AI-driven demand for semiconductors pushed three sector funds — JNGTX, PRSCX, and KTCAX — to fresh highs in 2026, as chipmakers from TSMC to IQE reported record sales tied to artificial intelligence infrastructure.

"The demand for our Indium Phosphide solutions, a key component in optical photonic products used in AI infrastructure and data centers, accelerated in the first half," IQE said in its July 21 trading update, as the UK wafer maker raised its 2026 revenue growth forecast to above 30 percent from 20 percent.

TSMC, the world's largest contract chipmaker, increased its US investment by $100 billion after posting record AI-driven earnings. European semiconductor stocks diverged as investors weighed AI demand against growth expectations, while IQE said first-half revenue reached at least 64 million pounds ($86 million), exceeding management expectations across all core businesses.

The sustained AI-led expansion is reshaping the semiconductor investment landscape. JNGTX, PRSCX, and KTCAX offer diversified exposure to a sector where AI infrastructure spending is projected to keep growing, with TSMC's capacity expansion and IQE's upgraded guidance signaling that demand remains robust through at least the second half of 2026.

TSMC's $100 Billion Bet on US Capacity

TSMC's decision to invest an additional $100 billion in American manufacturing underscores the scale of AI-driven chip demand. The Taiwan-based foundry, which counts Nvidia and AMD among its largest customers, posted record earnings in its most recent quarter as AI chip shipments surged. The investment expands TSMC's US footprint at a time when supply chain diversification has become a priority for technology companies.

IQE's Indium Phosphide Surge

IQE's upgraded forecast — revenue growth above 30 percent, up from a prior outlook of 20 percent — reflects accelerating demand for compound semiconductor wafers used in AI data centers. The company's Indium Phosphide solutions are critical for optical photonic products that enable high-speed data transmission between AI servers. IQE also cited strength in aerospace, defense, 3D sensing, and wireless markets, suggesting the AI tailwind is broadening beyond cloud infrastructure.

Fund Performance and Investor Implications

JNGTX, PRSCX, and KTCAX have captured the sector's momentum as semiconductor stocks benefit from AI-led demand. The funds provide exposure to companies across the chip supply chain — from design leaders Nvidia and AMD to manufacturers TSMC and Samsung Foundry to equipment suppliers Applied Materials and ASML. With IQE raising guidance and TSMC expanding capacity, the AI semiconductor cycle shows no signs of peaking in 2026.

This article is for informational purposes only and does not constitute investment advice.