Moore’s law keeps chip leaders ahead of the pack

“Cramming more components onto integrated circuits.”
That was the blunt title of Gordon E. Moore’s essay on silicon chips published in Electronics magazine in April 1965. In the space of just three pages, the director of semiconductor R&D at Fairchild Camera and Instrument Corp. outlined one of the most powerful observations in modern business and science. He wouldn’t have known it at the time, but it also serves as a precept ensuring semiconductor leaders stay ahead for as long as they keep spending.
Later dubbed “Moore’s Law” by noted scientist and engineer Carver Mead, that paper in the early days of electronics posited that the number of components per integrated circuit would double every two years. Moore, who went on to found Intel Corp., expected it would be the case for at least the following 10 years. Almost six decades later, it still holds true.
There’s almost no other sector in history that’s shown the same level of consistent development for so long. Cars are little faster than they were in 1965, although fuel economy almost doubled from 14.5 miles per gallon to 28.3 mpg. Battery technology, key to the future of electric vehicles, saw an even more impressive 40-fold improvement in cost per kilowatt-hour between 1991 and 2018.
Since Moore’s prescient remarks, the number of transistors per chip has increased from 100 to almost 50 billion while the size of components has shrunk. In simple terms, the density rate added a zero every 3.5 years. Moore published his original prediction as a logarithmic chart of base two, but in standard notation it looks more like a hockey stick.
An important implication of this trend is that the cost of computing plummeted. Chips work by feeding binary units (bits) of data into logic gates in various combinations, with the output giving the result of the calculation.
More gates mean a faster rate of computation, offering more powerful uses. Among the earliest was the deployment of chips to sense a target and calculate a trajectory in missile-guidance systems during the Vietnam War. It’s well-known that an iPhone today packs a stronger punch than a room full of circuits in 1970, and for much less money.
But around a decade ago, that started to change. As semiconductor analyst and writer Doug O’Laughlin pointed out, the price per gate plateaued and then began climbing from the 28 nanometer node. That technology was unveiled by Taiwan Semiconductor Manufacturing Co. in 2011, with rivals including United Microelectronics Corp. following in subsequent years.
The reason is simple: semiconductors are getting prohibitively harder to make. TSMC’s spending on equipment rose 74% last year to $30 billion, yet its shipments — measured in 12-inch wafers — climbed a mere 14.8%. While Moore’s Law offers more transistors, the cost escalations outweigh the density benefits. This year, TSMC will spend more than $40 billion.
These climbing costs are a major reason manufacturers have dropped out of the competition. In the early years Motorola and AMD were major names. Not anymore.
—Bloomberg