Semiconductor

AAA

DEFINITION of '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".

INVESTOPEDIA EXPLAINS '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. New Economy

    A buzzword describing new, high-growth industries that are on ...
  2. Gross Margin

    A company's total sales revenue minus its cost of goods sold, ...
  3. Operating Leverage

    A measurement of the degree to which a firm or project incurs ...
  4. Philadelphia Semiconductor Index ...

    A price-weighted index composed of 18 U.S. semiconductor companies ...
  5. Book-To-Bill Ratio

    The ratio of orders received to units shipped and billed for ...
  6. Silicon Valley

    A part of the San Francisco Bay Area that is known for the many ...
RELATED FAQS
  1. What economic indicators are important to monitor when investing in the electronics ...

    The most important economic indicators to monitor when investing in the electronics sector are global gross domestic product ... Read Full Answer >>
  2. What impact does Moore's Law have on the electronic sector?

    Moore's Law, framed by Intel co-founder Gordon Moore, continues to have a significant impact on the electronics sector as ... Read Full Answer >>
  3. What are the key barriers to entry for companies in the electronics sector?

    The electronics industry includes consumer electronics, specialized electronics for other industries and component parts ... Read Full Answer >>
  4. What are the main types of chips produced by semiconductor companies?

    The types of chips produced by semiconductor companies can be categorized in two ways. Usually, chips are categorized in ... Read Full Answer >>
  5. How can an investor make money from a decline in the electronics sector?

    Speculation methods, such as short selling, futures contracts and put options, offer investors a way to make money from a ... Read Full Answer >>
  6. How can an investor profit from a decline in the aerospace sector?

    Several forms of speculation enable investors to profit from a decline in the aerospace sector. Short selling aerospace stock ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Industry Handbook

    In this feature, we take an in-depth look at the various techniques that determine the value and investment quality of companies from an industry perspective.
  2. Investing

    Venturing Into Early-Stage Growth Stocks

    Picking these potential winners is all about sizing up risk. We show you how.
  3. Investing Basics

    A Primer On Investing In The Tech Industry

    The tech sector can provide fantastic returns for investors with a little know-how in the field.
  4. Mutual Funds & ETFs

    Should You Buy Stock Or An ETF?

    Not all investors are the same. By the same token, not all investment types are suited for each individual investor.
  5. Investing

    Clean Or Green Technology Investing

    Innovations in energy and consumption grow as companies adopt them to reduce costs.
  6. Active Trading

    The Advantage Of Intermarket Analysis

    Analyzing a variety of markets around the world can provide powerful insight into trading opportunities.
  7. Investing News

    Cost-Free Connection Of Target Groups To Marketers

    ZipDial spotted a niche marketing opportunity in the area of “missed calls” and developed a business around it. Here is how ZipDial works and its benefits.
  8. Savings

    WePay vs. PayPal Fees

    WePay and Paypal facilitate payments between businesses and people. Which one should you go with?
  9. Mutual Funds & ETFs

    The Top 3 Silver ETFs

    Like any tradable asset, silver and silver ETF prices are governed by the fundamental market economic forces of supply and demand.
  10. Active Trading Fundamentals

    Invest In Gold Through ETFs

    The mystique of the yellow metal captivates market players seeking hedges against inflationary pressure, safe haven in turbulent times and opportunities for speculative trading opportunities. ...

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center