There are several different semiconductor industries: Semiconductor - Equipment & Materials, Semiconductor - Broad Line, Semiconductor - Integrated Circuits, and Semiconductor - Foundry.
Chips, or semiconductors, make up the basis of all electronic equipment. Companies like MEMC provide the silicon wafers needed to make up the base of the semiconductor, then companies like Intel and AMD manufacture the semiconductors. Applied Materials and KLA-Tencor build the tools that actually produce and inspect the production of semiconductors.
Semiconductor Demand: The rapid progression in chip production has continually provided new streams of revenue for many tech companies. Advanced electronics such as the iPhone and the next generation game consoles have generated significant demand for companies like Applied Materials (AMAT), which is the largest manufacturer of semiconductor fabrication devices, along with Intel (INTC) and Advanced Micro Devices (AMD) whom are two of the largest semiconductor manufacturers.
The Sophistication of Chip Design: The difference in size and capacity of modern day chips compared to the recent past is incredible. The rapid progression of chip technology, as a result of Moore's Law, has allowed technology to be used in such unconventional places such as skis and athletic shoes. Advances such as the iPhone exemplify the amount of features that can be practically utilized in such a small device. The continued advancement of chip design will be a major factor in the sales of the semiconductor companies, in particular the semiconductor tool manufacturers such as Applied Materials and KLA-Tencor.
Source: http://www.wikinvest.com/industry/Technology
