Semiconductors

Chip Stocks

• Semiconductor companies sit at the bottom of almost every modern technology stack. Whether the end product is AI, smartphones, electric vehicles, cloud computing, drones, or industrial robots, it usually traces back to the same tiny set of chip designers and manufacturers. In that sense, semiconductors are basically the “raw material” of the digital world.

• The industry is one of the clearest examples of specialization creating enormous value. A company like Nvidia designs chips, Taiwan Semiconductor manufactures them, and firms like ASML build the machines that make the factories possible. No single company fully controls the stack, yet together they form one of the most strategically important supply chains on Earth.

• Chip stocks have historically been among the most cyclical investments in markets. Demand surges lead to shortages and euphoric spending; then excess inventory builds and prices collapse. The pattern has repeated across PCs in the 1990s, smartphones in the 2010s, and AI infrastructure in the 2020s. The technology changes, but the boom-bust rhythm tends to persist.