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Thanks Goodness for Semiconductors

 

Thanks Goodness for Semiconductors

Courtesy of Howard Lindzon

I treated myself to the new Apple iMac because I can afford it and it is a beautiful piece of hardware/furniture.

I have been working from/on an Apple MacBook for a very long time.

I LOVE it. It is fast, it is bright, and it has helped my productivity.

I have no idea what goes on inside this machine, but it is fantastic. Supposedly, I can thank the new Apple M1 chip.

I looked up the word semiconductor on Wikipedia and I was quickly reminded why I have no idea how computers (or anything for that matter) work. Here is the first paragraph:

A semiconductor material has an electrical conductivity value falling between that of a conductor, such as metallic copper, and an insulator, such as glass. Its resistivity falls as its temperature rises; metals behave in the opposite way. Its conducting properties may be altered in useful ways by introducing impurities (“doping”) into the crystal structure. When two differently-doped regions exist in the same crystal, a semiconductor junction is created. The behavior of charge carriers, which include electrons, ions and electron holes, at these junctions is the basis of diodes, transistors and most modern electronics. Some examples of semiconductors are silicon, germanium, gallium arsenide, and elements near the so-called “metalloid staircase” on the periodic table. After silicon, gallium arsenide is the second most common semiconductor and is used in laser diodes, solar cells, microwave-frequency integrated circuits, and others. Silicon is a critical element for fabricating most electronic circuits.

WTF!

I could not memorize this paragraph in a year.

My definition of semiconductors is:

They are magical toys

I don’t own any semiconductor stocks because I can’t explain them. When the internet bubble peaked in March of 2000, it took almost 18 years for the index to get back to all-time highs. That is a brutal bear market in an era where the internet continued to explode. Here is the chart:

The semiconductors are having a moment. The internet, crypto, cars, drones, robots, AI, biotech, computers…they power everything.

Yesterday the index broke out again:

With interest rates near zero I am excited to see semiconductors break out. That means more ‘magical toys’ are coming.

The bears will say semiconductors are cyclical (I used to say that). I am sure they are. I also think that technology has permeated every aspect of work and leisure life so I won’t try and time the cyclicality and just root for them and the engineers that understand them.


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