semiconductors

Overview

The semiconductor industry designs and manufactures the integrated circuits, or chips, that power essentially every piece of modern electronics — computers, phones, vehicles, industrial equipment and the data centres behind artificial intelligence. It's also one of the fastest-growing major industries by revenue: global semiconductor sales reached $791.7 billion in 2025, according to the Semiconductor Industry Association, up 25.6% from $630.5 billion the year before, a growth rate driven substantially by surging demand for the specialised chips used in AI accelerators and data-centre hardware.

While silicon is the base material for the vast majority of chips, the industry depends on a much wider basket of specialty metals to actually manufacture and package a working semiconductor, several of which are used nowhere else in significant volume — which is exactly what makes the industry's metal demand disproportionately influential on the prices of those smaller, less-traded metals.

Metals in Chip Manufacturing

Gallium and indium go into compound semiconductors — gallium arsenide and gallium nitride, in particular — used for high-frequency and high-power applications like radio-frequency chips, power electronics and LEDs, distinct from the pure-silicon chips used in general computing. Indium also has a second, unrelated role coating circuit boards and touchscreens as indium tin oxide. Tantalum is essential for the small, reliable capacitors used throughout circuit boards and mobile devices, valued for storing more charge in a smaller size than most alternatives. Tin remains the primary solder metal joining components to circuit boards across essentially the entire electronics industry, while copper carries current both within chip packaging and throughout the printed circuit boards chips are mounted on.

Market Dynamics

Semiconductor manufacturing is geographically concentrated in a handful of countries and companies capable of the enormous capital investment advanced chip fabrication requires, with Taiwan, South Korea, the United States and China together accounting for the large majority of global capacity. That concentration, combined with the industry's dependence on specific, thinly-traded specialty metals for advanced packaging and compound semiconductors, means a supply disruption or demand surge in chip manufacturing can move prices for metals like indium, gallium and tantalum far more sharply, in percentage terms, than it moves prices for larger, more liquid metals like copper or aluminium.