Chip stocks are on the rise, making up nearly 10% of the S&P 500 (^GSPC) and accounting for nearly half of this year's gains. Yahoo Finance's Akiko Fujita breaks down why semiconductors are so important.
"They are a critical component in almost everything that we use. So any news, any shortages will trickle across industries well beyond semis," Fujita explains. Chips can be used in devices ranging from smartphones to automobiles, and the United States continues to lead in research and development.
Most notably, semiconductor manufacturing is rising to meet the demands of the artificial intelligence boom. In just the last year, global chip sales came in over $500 billion and are expected to hit a trillion dollars by the end of the decade, according to McKinsey.
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