What is Semiconductors?
Semiconductors (chips) are integrated circuits that perform computation, memory, or specialized functions. The industry has three main models: Integrated Device Manufacturers (IDMs) like Intel and Samsung that design and fabricate; fabless designers (NVIDIA, AMD, Apple, Qualcomm) that design but outsource manufacturing; and pure-play foundries (TSMC, Samsung Foundry, Intel Foundry) that manufacture for others. Equipment makers (ASML, Applied Materials, Lam Research) supply the tools.
Why it matters for investors
Semiconductors are strategic infrastructure — central to economic competitiveness, defense, and AI leadership. Government policies (US CHIPS Act, EU Chips Act, Japan, India, Korea subsidies) reflect their geopolitical importance. The industry is highly cyclical, with boom-bust patterns driven by capex investment lags and end-market demand swings.