The density of metal and semiconductor nanocrystals is discrete at the band edges. The Fermi level is in the center of a band in a metal, and so kT will exceed the level spacing even at low temperatures and small sizes. Nevertheless, metal nanoparticles of very small size can exhibit insulating properties. In contrast, in semiconductors the Fermi level lies between two bands, so that the relevant level spacing remains large even at large sizes. The band gap increases in smaller semiconductor nanocrystals.