The discussion clarifies that solid state devices primarily refer to semiconductor devices, distinguishing them from vacuum tube devices. The first solid state device is identified as the semiconductor diode, while transistors are also classified as solid state devices. Participants question why diodes are not always categorized alongside other solid state devices like microprocessors and DRAM, despite being made of semiconductors. The conversation highlights the need for clearer definitions and categorizations within the context of solid state technology. Overall, solid state devices encompass a range of semiconductor technologies, including diodes, transistors, microprocessors, and DRAM.