What are semiconductor wafers and why are they important?

Semiconductor wafers are thin slices of semiconductor material (like silicon) that serve as the foundation for electronic components. They're the base material upon which integrated circuits (microchips) are built. Without these wafers, we couldn't produce the processors that power smartphones, computers, cars, and virtually all modern electronics. Companies in this collection specialize in producing these essential materials and the equipment needed to transform them into functioning chips.

What is a semiconductor foundry?

A semiconductor foundry is a factory that manufactures integrated circuits (chips) for other companies. Unlike integrated device manufacturers (IDMs) who design and produce their own chips, foundries specialize in manufacturing chips designed by others. Companies like TSMC (TSM) and UMC are "pure-play" foundries that produce chips for major technology companies. They're essential to the digital economy because most tech companies don't have their own manufacturing capabilities and rely on these specialized facilities.

How does the growth of AI affect these companies?

Artificial intelligence systems require massive computing power, which translates to high demand for advanced semiconductors and memory components. AI data centers need specialized chips, enormous amounts of memory, and power management solutions. As AI adoption grows, companies in this collection that produce the fundamental materials, manufacturing equipment, and components for semiconductors stand to benefit significantly from increased demand for their products and services.

What is lithography in semiconductor manufacturing?

Lithography is a critical process in semiconductor manufacturing that uses light to print tiny patterns onto silicon wafers, essentially creating the intricate circuitry of microchips. It's similar to traditional photography, but at an incredibly small scale. Companies like ASML produce advanced lithography systems that use extreme ultraviolet (EUV) light to create patterns just a few nanometers wide - thousands of times thinner than a human hair. This technology is essential for producing the most advanced chips that power modern computing.

16 handpicked stocks

Digital World's Skeleton

Behind every smartphone, AI system, and data center lies a foundation of essential materials. This collection features companies producing the critical components that make our digital world possible. Carefully selected by our analysts, these stocks represent the building blocks of modern technology.

Han Tan | Market Analyst

Updated 2 days ago | Published at juin 17