A semiconductor is a material product usually comprised of silicon, which conducts electricity more than an insulator, such as glass, but less than a pure conductor, such as copper or aluminum. Their conductivity and other properties can be altered with the introduction of impurities, called doping, to meet the specific needs of the electronic component in which it resides.
Also known as semis, or chips, semiconductors can be found in thousands of products such as computers, smartphones, appliances, gaming hardware, and medical equipment.
Semiconductor devices can display a range of useful properties, such as showing variable resistance, passing current more easily in one direction than the other, and reacting to light and heat. Their actual function includes the amplification of signals, switching, and energy conversion.
Therefore, they find widespread use in almost all industries and the companies that manufacture and test them are considered to be excellent indicators of the health of the overall economy.
The semiconductor industry is a hugely important sector for both the U.S. and world economies, with semiconductor components found in a wide range of consumer and commercial products, from vehicles to computers to mobile devices and personal electronics.
Broadly speaking, semiconductors fall into four main product categories:
Memory chips serve as temporary storehouses of data and pass information to and from computer devices’ brains.1 The consolidation of the memory market continues, driving memory prices so low that only a few giants like Toshiba, Samsung, and NEC can afford to stay in the game.
These are central processing units that contain the basic logic to perform tasks.1 Intel’s domination of the microprocessor segment has forced nearly every other competitor, with the exception of Advanced Micro Devices, out of the mainstream market and into smaller niches or different segments altogether.
Sometimes called “standard chips”, these are produced in huge batches for routine processing purposes. Dominated by very large Asian chip manufacturers, this segment offers razor-thin profit margins that only the biggest semiconductor companies can compete for.
“System on a Chip” is essentially all about the creation of an integrated circuit chip with an entire system’s capability on it. The market revolves around the growing demand for consumer products that combine new features and lower prices. With the doors to the memory, microprocessor, and commodity integrated circuit markets tightly shut, the SOC segment is arguably the only one left with enough opportunity to attract a wide range of companies.
Success in the semiconductor industry depends on creating smaller, faster, and cheaper products. The benefit of being tiny is that more power can be placed on the same chip. The more transistors on a chip, the faster it can do its work. This creates fierce competition in the industry and new technologies lower the cost of production per chip.