Moore's Law describes the trend that the number of transistors on an integrated circuit doubles approximately every two years. The rule was first explained by Gordon Moore, co-founder of Intel, in 1965. It's been accurate ever since, but the Financial Times reports that Moore's Law may soon be broken. The problem is not technology -- it's cost.
"The high cost of semiconductor manufacturing equipment is making continued chipmaking advancements too expensive to use for volume production, relegating Moore's Law to the laboratory and altering the fundamental economics of the industry," wrote Len Jelinek, chief analyst for semiconductor manufacturing at the iSuppli research firm, last month.
Mr Jelinek predicted that Moore's Law would no longer drive volume chip production from 2014, sparking intense debate in Silicon Valley.
Jelinek's rationale has to do with the tools involved in producing circuits with increasing transistor density. They're going to be too expensive. Yet, according to Andy Bryant, Intel's chief administration officer, Moore always meant for his law to be more about economics than technology, so it should hold up:
"Moore's Law is really not about the science, it's about the business model that the science drives," he says. "What Gordon said was the model is driven by the cost reductions that are allowed - the science takes the technology into more and more devices and the volume will explode because the cost comes down, so it is an economic model."
So as long as demand can be maintained by consumers and businesses wanting the latest gadgets and features, Moore's Law, and the huge investments it entails, will continue to make economic sense for fab builders.
The question, then, is whether demand can keep up with the rising costs. So far it has, but Jelinek believes that might change. I'm not convinced. If mobile devices like the iPhone and Kindle continue to be popular, then more advanced chips will too. A while back, I noted the iPhone 3g S's success despite the recession. I mentioned Samsung's in another. If people are still willing to spend money for the best technology in the face of the worst recession most of them have known, then I find it unlikely new technology has much to worry about in terms of demand.
Yet, as those tools to make new chips become more expensive, the industry certainly will change -- Jelinek is right about that. As the FT article notes, you'll see fewer chipmakers willing to take on those costs:
The 14 chipmakers who were in the game at the 90nm level have been reduced to nine at the current 45nm level. Only two of them - Intel and Samsung - have firm plans for 22nm factories.
As a result, rather than demand, Moore's Law could suffer if monopolistic behavior drives up chip price beyond even what consumers exhibiting strong demand will pay. If that happens, then Moore's Law might have problems.