In 1965, Gordon Moore predicted that computer chips would double in performance every two years at low cost, now known as Moore’s aw. He also predicted that chips they would eventually be so small and inexpensive that they could be embedded in homes, cars and what he called “personal portable communications equipment.” In 1968, he and Robert Noyce founded NM Electronics, soon renamed to Integrated Electronics and then shortened to Intel. Integrated circuits were just in their infancy at that point, with companies trying to deal with the technical issues of putting even eight transistors in a single chip.
Of course, Moore’s law is not a physical law, but, thanks in significant part to the work of Intel, it has held remarkably true for 50 years. However, earlier this year Intel announced that it will not continue to keep up with Moore’s Law.
This issue is part science and part finance. As a result of the shrinking the size of microscopic transistors in a modern integrated circuit, these transistors are closer together. This causes two problems: heat and quantum effects. In order to achieve the desired high performance, these packed transistors generate a lot of heat. Too much heat can literally fry a chip, making it useless. Quantum effects cause their behavior to become unpredictable, not a desired trait in the way we use computers today.
The financial problem is due to the cost to produce these new integrated circuits. Today, each machine to “stamp” out chips costs about US$50M. Each future “generation” of chips will increase the design and production cost by up to 50%, meaning a new chip factory may cost US$10B to build.
What does this mean to you and your company? Probably not much in the short term. In fact, if you are lagging a little in your technology usage in your products, this may give you a chance to catch up. Not surprisingly, chip manufacturing companies are working on several alternative solutions to continue to drive growth in semiconductors:
- Carry on the current path. The real obstacle is simply money. For those cases where you actually need to get maximum performance from a single small package, you will likely to be able to get it. You may not like the cost, as there will be large production costs and smaller demand.
- New technologies including spintronics, carbon nanotubes, and quantum computing. Intel plans to move from silicon-based transistors over the next 4-5 years.
For most companies, the real solution is distribution. We see new products every day with embedded processors connected to a network. For the past decade, cars have contained dozens of computers, each assigned to one function like brakes, cruise control, entertainment systems, and even door locks. As the car manufacturers move towards full autonomous vehicles, we are seeing integration of all the computers within a car into a single network, with additional computers added for new functions. We will over the next ten years see the cars themselves integrated into a wider network including other cars and traffic signals and monitors.
As you are looking at your future product plans, consider distribution both within your product and to the outside world as a way to expand capabilities and performance and attract new customers. Always remember that the Cloud is there to help.
The last word:
I was one of 23 thought leaders recently featured in Tenfold’s “23 Thought Leaders Answer: What’s Your #1 Tip for a Successful First Meeting with a Prospect?” You might want to check it out.
Keep your sense of humor.