Semiconductors: What is the Fuss About – By Ramsey Crookall

28 May 2025

What is a Semiconductor?

A semiconductor is a material that lies between a conductor (like copper) and an insulator (like glass) in terms of its ability to conduct electricity. Thanks to its unique properties, it can precisely regulate electrical currents, making it indispensable for modern electronic devices.

A Brief History of Semiconductors

The origins of semiconductors trace back to the 19th century, but the industry has greatly advanced over the past 75 years. Key milestones include:

  • 1947: John Bardeen, Walter Brattain, and William Shockley created the first transistor at Bell Labs using germanium, sparking the birth of modern semiconductor electronics.
  • 1950s: Silicon took over from germanium because of its superior heat resistance and greater availability.
  • 1958: Jack Kilby (Texas Instruments) and Robert Noyce (Fairchild Semiconductor) independently developed the integrated circuit (IC), packing multiple components onto a single chip.
  • 1971: Intel released the first microprocessor, the 4004, revolutionising the computing world.
  • 1980s–2000s: Rapid miniaturisation and improved performance, driven by Moore’s Law, powered the explosion of personal computers, mobile phones, and the internet.
  • 2010s–2020s: Semiconductors became critical across smartphones, AI systems, solar panels, electric vehicles, and quantum computing initiatives.

Why Semiconductors Matter

Semiconductors form the foundation of today’s tech-driven world. Their ability to control electrical currents precisely enables the functioning of microprocessors, memory devices, sensors, displays, and communication equipment. Without semiconductors, we wouldn’t have smartphones, AI, cloud computing, or electric vehicles.

Key Players within the Semiconductor Industry

Several major companies shape the semiconductor landscape, spanning design, manufacturing, and equipment supply:

Taiwan Semiconductor Manufacturing Company (TSMC)

  • Country: Taiwan
  • Role: Manufactures chips designed by others (pure-play foundry, which is a company that does not offer a significant amount of integrated circuit (IC) products of its own design but instead operates semiconductor fabrication plants focused on producing ICs for other companies.)
  • Clients: Apple, AMD, NVIDIA, Qualcomm
  • Highlights: The world’s largest and most advanced semiconductor foundry, leading cutting-edge nodes like 3nm and 2nm.

NVIDIA

  • Country: United States
  • Role: Fabless designer (a company that designs and markets semiconductors while outsourcing that hardware’s fabrication (or fab) to a third-party partner, who produces them in foundries)
  • Products: AI chips (such as the H100 and A100), SoCs
  • Highlights: Dominates the GPU and AI accelerator markets and relies on TSMC for chip production.

Broadcom Inc.

  • Country: United States
  • Role: Fabless designer
  • Products: Networking, broadband, and enterprise storage chips
  • Highlights: Key supplier to Apple and cloud data centres; expanded into software with the acquisition of VMware in 2023.

ASML Holding

  • Country: Netherlands
  • Role: Equipment supplier
  • Products: Photolithography machines, especially Extreme Ultraviolet (EUV) systems
  • Highlights: The sole supplier of EUV lithography systems, essential for manufacturing sub-5nm chips, serving TSMC, Samsung, and Intel.

Intel Corporation

  • Country: United States
  • Role: Integrated Device Manufacturer (IDM)
  • Highlights: A pioneer in microprocessors, expanding into foundry services, and investing heavily in US-based chip production with support from the CHIPS Act.

Global Challenges: Tariffs and Trade Restrictions

Since the second Trump administration, the semiconductor sector has seen evolving tariffs and trade regulations:

  • Certain semiconductor products like manufacturing equipment and integrated circuits gained temporary tariff exemptions from 11th April 2025.
  • New Trump policies hint at revisiting Biden-era restrictions, especially concerning national security and AI technology.
  • US-China tensions continue to significantly impact the semiconductor supply chain.

The Future of Semiconductors

The semiconductor industry’s future looks transformative, driven by major trends:

  • Smaller Chips: Pushing toward sub-2nm processes.
  • New Materials: Researching Gallium Nitride (GaN) and Graphene for enhanced efficiency and performance.
  • Healthcare Technology: Expanding the use of semiconductor devices in medical and wearable technologies.
  • Quantum Computing: Investing in quantum chips that offer unprecedented computational power.
  • Sustainable Tech: Focusing on the development of energy-efficient, “green” chips.

Other Notable Trends:

  • AI Hardware: Rise of specialised AI chips.
  • Supply Chain Resilience: Governments are encouraging domestic chip production.
  • 3D Chip Stacking: Innovations like chiplets and 3D ICs are pushing performance to new heights.
  • Automotive Demand: Exploding needs from electric and autonomous vehicle sectors.

Beyond 2025, the semiconductor market is expected to grow at an annual rate of 7-9%, reaching a $1 trillion valuation by 2030.  This expansion will be fuelled by rising demand for high-performance computing, memory and artificial intelligence (AI) driven technologies.  Semiconductors play a pivotal role in an increasingly uncertain world and technology companies seeking to ride that momentum have to navigate an unpredictable geopolitical landscape.

Contact Us

Our experienced team at Ramsey Crookall are ready to assist you with investments in the semiconductor and technology sectors.

Email: dealers@ramseycrookall.com Phone: +44 1624 623884

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing carries risks, and the value of investments can rise or fall. Please conduct your research or consult a financial adviser before making investment decisions.