Semiconductors are everywhere. From powering your phone to guiding satellites, they’ve reshaped daily life in ways that are easy to overlook. One of the simplest reminders sits in our wallets: that tiny gold square on many credit and debit cards. That little chip isn’t just decoration. It’s a semiconductor device — and it transformed how we pay for things.
To see how much things have changed, I spoke with someone who remembers checkout lines before chip cards were common. “Back then it was a lot of checks or cash. Checks were really big,” she told me. “When you wrote a check, people would write down your drivers licence expiration data, and sometimes they wouldn't even take out-of-state checks.” Magnetic-stripe cards existed, but swipes were easy to copy. “Sometimes we had to call the bank to confirm funds,” they added. In other words: slower, less secure, and more hassle.
So where did the little chip even come from? The story starts with the transistor. In 1947, Bell Labs researchers John Bardeen, Walter Brattain, and William Shockley created “the basic building block of all modern computer chips”. The trio was recruited at Bell Labs to work on finding a more efficient replacement for the vacuum tube triode – an old device that made “commercial telephone, radio, and sound recording possible”. They were able to demonstrate that semiconductors were able to amplify weak electrical signals much more efficiently than the vacuum tube triode in 1947. Their proof-of-concept laid the foundations for all modern semiconductors.
Transistors made electronics smaller and more efficient, but the real leap came when engineers figured out how to build many transistors together on a single piece of semiconductor. In 1958–59, Jack Kilby at Texas Instruments and Robert Noyce at Fairchild earned a Nobel Prize for independently pioneering the integrated circuit (IC). That breakthrough made it practical to pack millions—and eventually billions—of transistors in tiny spaces, which is exactly what today’s card chips use.
So what can the card do? Unlike the old magnetic stripe, which stored unchanging data, the chip can compute. When you insert or tap your card at an EMV-compatible terminal, the terminal and card run a cryptographic handshake. The chip then generates a unique, one-time code (often called a “cryptogram”) for that specific transaction. That single-use code proves the card is genuine without revealing your primary account number in a reusable way—so a criminal can’t just clone the data and make a working counterfeit card.
For transactions, there are two different types of EMV chips: contact and contactless. Contact smart cards must be inserted so the reader touches the gold contact plate and exchanges commands and data through those pads. Contactless cards work over short-range radio frequency when they’re held within about ½–3 inches of the reader; the reader’s field also powers the chip to complete a tap. Some cards are dual-interface, using one chip that supports both contact and contactless; hybrid cards carry two separate chips, one for each method. Inside, many payment cards use a microcontroller (able to store data, run encryption, and make on-card decisions), while simpler memory-chip cards rely more on the reader and are suited to lower and medium-security applications.
Hearing that might make you look differently at a checkout terminal. Instead of a dumb read head pulling static data off a stripe, you’re watching two computers—terminal and card—prove things to each other in fractions of a second. My interviewee summed up the practical effect from a frontline perspective: “You know, I know this guy who works at American Express. You know what he said the number one cost was? Fraud.” EMV didn’t end fraud, but it made the in-person, card-cloning kind much harder—and that alone changed store policies, reduced those awkward “call to authorize” moments, and sped up lines over time. Concrete results followed: at U.S. merchants that completed the EMV chip upgrade, counterfeit card-present fraud dollars fell 87% by March 2019 versus September 2015.
What started as an experiment has reshaped habits. People now expect fast, secure, often touch-free transactions—trust that simply wasn’t there in the days of carbon-copy slips,
checkbooks, and easily-skimmed stripes. If you want a small, tangible reminder of decades of innovation, try a close-up photo of your card’s contact pad: each geometric patch maps to a standardized connection that wakes up a tiny computer, runs cryptography in the blink of an eye, and makes a payment feel…ordinary. That’s the power of semiconductors when they disappear into everyday life.
Len Kim
Works Cited
“A Building Block of Modern Tech.” Illinois.edu , 2024, http://grainger.illinois.edu/news/magazine/building-block-of-modern-tech
Alfred, Randy. “Sept. 12, 1958: Kilby Chips In, Integrates Circuit.” WIRED , 12 Sept. 2011, http://www.wired.com/2011/09/0912kilby-demos-integrated-circuit Accessed 2 Oct. 2025
Palmer, Shelley. “What Is EMV Technology? Definition, Uses, Examples, & More.” Chargebacks911 , 18 Apr. 2025 http://chargebacks911.com/what-is-emv Accessed 2 Oct. 2025
“Smart Card Primer.” Secure Technology Alliance , 4 May 2018, http://www.securetechalliance.org/smart-cards-intro-primer Accessed 2 Oct. 2025
“The Transistor, Explained.” Newsroom , 12 Mar. 2025, http://newsroom.intel.com/tech101/the-transistor-explained
“Visa Chip Card Update.” Visa.com , Visa, June 2019, http://usa.visa.com/content/dam/VCOM/blogs/visa-emvchip-infographicQ2-080819-v2a.pdf Accessed 1 Oct. 2025
