An integrated circuit (IC), sometimes called a chip or microchip, is a semiconductor wafer on which thousands or millions of tiny resistors, capacitors, and transistors are fabricated. An IC can function as an amplifier, oscillator, timer, counter, computer memory, or microprocessor. A particular IC is categorized as either linear (analog) or digital, depending on its intended application.

Linear ICs have continuously variable output (theoretically capable of attaining an infinite number of states) that depends on the input signal level. As the term implies, the output signal level is a linear function of the input signal level. Ideally, when the instantaneous output is graphed against the instantaneous input, the plot appears as a straight line. Linear ICs are used as audio-frequency (AF) and radio-frequency (RF) amplifiers. The operational amplifier(op amp) is a common device in these applications.

Digital ICs operate at only a few defined levels or states, rather than over a continuous range of signal amplitudes. These devices are used in computers, computer networks, modems, and frequency counters. The fundamental building blocks of digital ICs are logic gates, which work with binary data, that is, signals that have only two different states, called low (logic 0) and high (logic 1).