What is a 'Semiconductor'

A materials product - usually comprised of silicon - which conducts electricity more than an insulator but less than a pure conductor, such as copper and aluminum. Semiconductors are usually very small and complex devices, and can be found in thousands of products such as computers, cell phones, appliances, and medical equipment.

Also known as "chips" or "semis".

BREAKING DOWN 'Semiconductor'

As semiconductors have evolved and become more powerful, they have propelled many industries forward into a technological age. They are still an expensive component in many devices, so their pricing and demand trends go a long way in determining the profit potential of companies that sell devices with semiconductors in them. Chips are made by the billions each year, and their sales & pricing trends are widely followed by analysts as a harbinger of technology-related profits.

Semiconductor makers often see "boom and bust" cycles based on the underlying demand for chip-based products. When times are good profit margins can run very high for chipmakers; when demand falls through however, chip prices can fall dramatically and have a major affect on many industries' supply chains.

RELATED TERMS
  1. Semiconductor Industry ETF

    A sector-following fund that invests in developers, manufacturers ...
  2. Philadelphia Semiconductor Index ...

    A price-weighted index composed of 18 U.S. semiconductor companies ...
  3. Morris Chang

    The founder, chairman and CEO of Taiwan Semiconductor Manufacturing ...
  4. Book-To-Bill Ratio

    The ratio of orders received to units shipped and billed for ...
  5. Fabless Company

    The Fabless Semiconductor Association (FSA) defines fabless as ...
  6. Blue Chip

    A nationally recognized, well-established and financially sound ...
Related Articles
  1. Insights

    Trading Semiconductor Chip Stocks

    Historically, mid- and small-cap semiconductor companies have generated momentum because they usually show the most growth potential. Companies within this range are often those that have yet ...
  2. Trading

    The Basics Of Trading Chip Stocks (INTC, TXN)

    Semiconductor companies offer an endless variety of trading and investment opportunities.
  3. Investing

    3 ETFs That Invest in Semiconductors (SOXX, SMH)

    Obtain information on three of the most widely traded ETFs that investors utilize to gain investment exposure to the important semiconductor industry.
  4. Investing

    Is Smaller Better? In the Chip Sector, Yes: TSM

    One of the world's biggest semiconductor manufacturers, one you might never have heard of, creates products you use every day.
  5. Investing

    USD vs. SOXL: Comparing Leveraged Semiconductor ETFs

    Discover and compare two semiconductor exchange-traded funds. Learn about their purpose, strategy, characteristics and investor suitability.
  6. Investing

    The World's Top 10 Semiconductor Companies (TSM,INTC)

    Discover how some of the most successful companies in the semiconductor industry are well-known brands while others are thriving in relative obscurity.
  7. Investing

    The Top 5 Semiconductor ETFs for 2016 (SMH, SOXX)

    Discover how you can get immediate exposure to semiconductor stocks through five of the best semiconductor ETFs available in 2016.
  8. Investing

    SMH: Market Vectors Semiconductor ETF

    Discover how the Market Vectors Semiconductor ETF chooses its securities, and learn the types of investors for whom this fund is most appropriate.
  9. Investing

    The Semiconductor Sector is on the Verge of a Breakout (SMH, INTC)

    The semiconductor sector may be on the verge of a major breakout that provides market leadership in 2016.
  10. Financial Advisor

    Learn How to Trade Semiconductor Stocks in 4 Steps (SOX, INTC)

    The enormously diverse semiconductor industry requires market players looking for exposure have specialized knowledge.
RELATED FAQS
  1. What are the most popular leveraged ETFs that track the electronics sector?

    Discover the most popular leveraged ETFs that track the electronics sector. Semiconductors are an integral member of the ... Read Answer >>
  2. What are "fabless" chip makers and why are they important in the semiconductor market?

    Learn about fabless chip makers and why some of the biggest names in the semiconductor industry have adopted the fabless ... Read Answer >>
  3. What consumer products drive most of the demand for chips produced by semiconductor ...

    Learn how the demand for consumer products, such as smartphones and cloud-based services, is increasing the market for semiconductor ... Read Answer >>
  4. What impact does Moore's Law have on the electronic sector?

    Understand the groundbreaking implications of Moore's Law on the economic health of several industries, including semiconductors ... Read Answer >>
  5. What are the main types of chips produced by semiconductor companies?

    Learn about two ways in which chips in semiconductors industry are categorized: by functionality and by type of integrated ... Read Answer >>
  6. What are the best mutual funds for investing in the electronics sector?

    Learn which mutual funds are popular among investors interested in the electronics industry and how these mutual funds add ... Read Answer >>
Hot Definitions
  1. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  3. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  4. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  5. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  6. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
Trading Center