How do semiconductor stocks work?

Since the epidemic, there has been a significant increase in the desire for many forms of technology, including mobile devices, artificial intelligence, electric vehicles, and more.

As described, semiconductor businesses are the design and production forces that create the essential components of the large (and global) electronic industry.

As a result, semiconductor hardware has been needed, including chips and microprocessors.

Is it a good idea to trade or invest in semiconductor stocks?

This kind of query always demands a personal response. But, first, recognize the distinction between trading and investing.

In the broadest sense, semiconductor stocks are a viable trading or investment commodity given the situation of the tech industry today.

Everyone has a varied level of industry expertise and risk tolerance, so queries of this nature must be answered subjectively.

It would make sense for a trader or investor concentrating on diverse and general tech industries to pay attention to successful and promising semiconductor stocks.

Understanding Semiconductors

Many practical characteristics of semiconductor devices include:

  • Changeable resistance.
  • More effortless current flow in one direction compared to the other.
  • Responsiveness to heat and light.

In addition, they do signal amplification, switching, and energy conversion.

As a result, they are widely used in practically all industries, and the businesses that produce and test them are seen as excellent indicators of the state of the economy.

With semiconductor components in various consumer and commercial items, including cars, computers, mobile devices, and personal electronics, the semiconductor business is vital for both the U.S. and global economies.

Semiconductor Types

Based on the “impurities” that are added to the crystalline silicon during the “doping” process to change the properties of the completed semiconductor, semiconductors can be divided into two primary categories:

N-type semiconductors: These are one or more pentavalent atom-based impurities, such as phosphorus, arsenic, antimony, and bismuth.

P-type semiconductor: contains dopants with five electrons. For this reason, phosphorus, antimony, or arsenic are frequently utilized.

An Intrinsic Semiconductor: What Is It?

A semiconductor with no impurities or dopants added to it, unlike p- and n-type semiconductors is referred to as intrinsic or pure. In inherent semiconductors, n = p, the ratio of excited electrons to holes.

Electric vehicles and smartphones are two applications that are anticipated to drive the worldwide semiconductor market in the upcoming years. The smartphone semiconductor industry was valued at $116 billion in 2020, and by 2030, it is expected to grow to $162 billion. The market for battery electric vehicles was valued at $47 billion globally in 2020, and it is anticipated to increase to $212 billion by 2030, with a CAGR of 14.1%.


The COVID-19 epidemic has also had an impact on the semiconductor sector. More technological equipment was in demand as more people chose to work from home, and the semiconductor industry needed help to meet this demand globally. The market for discretionary tech products has decreased, resulting in a global economy recession and reduced revenues for semiconductor businesses.