Why this matters for beginners
Knowing where a company fits helps you compare it fairly and see which risks it shares with others. This is general education, not personal advice.
Main explanation
An industry is a group of companies selling similar products or services, such as airlines, banks or semiconductors.
Grouping companies helps you compare them fairly, because they face similar customers, costs and trends.
Inside one industry, business models can be very different. In semiconductors, some firms only design chips, some only manufacture them, and some do both.
Example using a real company
In semiconductors, Nvidia mainly designs chips and has others manufacture them, TSMC manufactures chips for many designers, and Intel has historically done both.
- →Designer: earns from selling chips it designs.
- →Foundry: earns by manufacturing chips for others.
- →Integrated: designs and makes its own.
Common beginner mistakes
- ✕Assuming companies in one industry earn money the same way.
Key terms
- Industry
- A group of companies providing similar products or services.
Key takeaways
- 01Industry = similar products or services.
- 02Same industry, different business models is normal.
Check yourself
- 01What does an industry group together?
Try the concept on a real company
Compare how two companies in the same industry describe what they sell.
Educational examples only. Not buy or sell recommendations.