What it is
A semiconductor is a material whose electrical conductivity can be precisely controlled, making it ideal for electronic components. Silicon is the most common semiconductor, used to create integrated circuits (chips) that power nearly all electronic devices. These chips contain billions of tiny transistors, acting as on-off switches, enabling complex computations and data processing. The properties of semiconductors are fundamental to the functioning of CPUs, GPUs, and memory chips.
Semiconductors are at the core of the tech economy, driving innovation in computing, communications, and artificial intelligence. Their demand and supply influence the entire electronics industry, from smartphones to data centers. News often focuses on "chip shortages" or "chip export controls," which can impact product availability and prices. Governments globally view semiconductor manufacturing as a strategic asset, leading to significant policy initiatives like the CHIPS Act to bolster domestic production.
Why it matters
Semiconductors are essential components in almost every electronic device you own or use, directly impacting product availability, innovation, and prices across technology sectors.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice