End of Moore’s Law and US /MSFT Bullying on World Trade

Please scroll through the illustrations now to actually see the point of this article. You live under Moore’s Law whether you know it or not. (See "MOORE’S LAW ENDING" GRAPH.) You will know — feel, like an earthquake — when it ends. Your computer and economy depend on Moore’s Law, which says the maximum number of transistors on an IC chip doubles every 2 years. (See EXPONENTIAL-GROWTH GRAPH.) Herein, I predict that the ultimate number of transistors on a chip will be less than 10 billion. -http://home.earthlink.net/~moores-law/

There are physical obstacles to shrinking transistors further, but economics — commoditization (cheap, generic computers) — will get us first. (See TETRAD FIGURE ON SEMICONDUCTORS.) Believe it or not, the fickle American consumer will be demanding economy, mobility, and Internet-based services IN PLACE OF more computer performance and upgrades.

The emerging markets of India and China, half the world’s population, will create a humungous demand — and source — for cheap computers. These Asian notebook PCs will cost less than $200 to own, and Americans will demand them, too, at grave danger to Intel, Microsoft, and Dell. (See PHOTO, $150-200 COMPUTER.) http://home.earthlink.net/~moores-law/

THE END OF MOORE’S / INTEL’S LAW AND MICROSOFT’S LAWLESSNESS

Moore’s Law, popularized by Gordon Moore in 1965, became the basis of Intel’s business plan when Moore and Robert Noyce founded Intel in 1968; and long ago the semiconductor and computer industries (numerous companies) adopted it as their own business plan, or "roadmap." The law never was considered a real law that expressed the way things have to work, like Newton’s law of gravitation or even the economics law of supply and demand. In the future, the market demand will be for a vastly larger number of processors (remember the masses of new users in the developing world) but, generally, NOT MORE POWERFUL AND COMPLEX ones. So the end of Moore’s Law about IC complexity is at hand. Even though it was really just a rule of thumb and a planning tool, its end will have a huge impact on the world and on individuals like you. There might be another Tech Wreck. Some big companies might be destroyed. But then, finally, computing will be unshackled from the Intel-Microsoft combine (Wintel). -http://home.earthlink.net/~moores-law/

MOORE’S-LAW-ENDING GRAPH — RED LINE

Refer to the graph. One dashed line shows transistors-per-chip doubling every 18 months, as often stated for Moore’s Law — though Moore himself never said 18 months. The alleged 18-month doubling has been extended, by various writers, from least-cost components to maximum achievable transistor count, to processor and computer power (rate of doing computing work). Conversely, 18-month halving has been applied to prices for computers and computing power. Actually, data, even for transistors-per-chip, do not fit this "curve." Where the 18 months probably came from was the average of Moore’s original 1965 estimate of 12 months and his 1975 estimate of 24 months.

Another dashed line shows maximum transistors on a chip doubling every two years, just as Moore planned in 1975 and actually a fairly accurate representation for 1971 to 2006, based on the chips chosen. In 2006, Intel Corp. is spending billions of dollars in the midst of switching plants over to the 65-nanometer fabrication (manufacturing) technology "node" (step), from 90-nm. Basically such switches every two years keep chips moving up the complexity scale — and following the "curve" more or less — by allowing printing of smaller transistors and other features (e.g., 65 nm, by a "line + space" measure, instead of 90 nm) on silicon chips.

At the same time, Intel has announced a $1-billion spending cut for 2006. Something’s got to give since it is Intel’s capital spending that propels complexification per Moore’s Law (its traditional business plan).

THE RED LINE

To draw the red line representing the slower future pace of Moore’s Law, I have performed a statistical analysis based on a logistic-regression model and past data for Intel chips. I am confident that statistics, not physics, is the way to look at the future of Moore’s Law. We have plenty enough experience now to know what the outcome will be. I will explain later how IC complexity follows a logistic (natural-growth) S-curve, with a predictable limit, as in biology — instead of the ever-upward curve (J-curve or hockey-stick curve) assumed by Moore’s Law adherents. Logistic curves are useful for forecasting in many fields. No matter how much money Intel and the U.S. government throw at the problem of making more complex chips, the returns are in and we can now know approximately the limit of semiconductor complexity and when it will arrive (same as for peak oil production).

The graph suggests that the slowing of Moore’s Law should soon become evident. The sure, visible signs will be product delays, especially in nanotechnology generations (nodes), from Intel, the proprietor of the law — and other bad news (financial, market share, etc.) from Intel, Dell, and related companies.

PRODUCT DELAYS WOULD MEAN MOORE’S LAW WINDING DOWN

Observers are watching Intel for any signs of product delays, which could mean Intel is having trouble financing more of Moore’s Law. In 2007 Intel intends another switch, to 45-nm fabrication. This will be even more expensive than 65 nm, with a switch to different or modified materials for gates, gate insulators, and channels. (In transistor operation, the channel is the path the current follows, and the gate is an area alongside the channel, to which a voltage is applied to turn the current on or off, thus representing binary 1 or 0. A silicon-oxide layer is an insulator between the gate from the channel.) Also, in fabrication, 45 nm involves immersing the silicon wafer in water before "printing" (exposing the film to make a pattern) on it. http://www.intel.com/education/makingchips/fabrication.htm
http://home.earthlink.net/~moores-law/

ELECTRONICS INDUSTRIES GETTING TOO BIG FOR THEIR BREECHES—
FROM J-CURVE TO S-CURVE (See EXPONENTIAL-GROWTH GRAPH.)

So far (2006) the semiconductor and computer industries have been growing on their own ("endogenous" growth). The growth has worked like compound interest, with growth feeding upon growth and tracing out an ever steeper upward curve (and a rapidly waning price decline). The growth is called "exponential": X to some power or exponent. Immature, young industries often grow this way. Moore’s Law about ICs also is exponential but represents a faster growth (almost 30% a year) than that of the industries. The revenue increase isn’t that great: PC sales are increasing only about 10% a year worldwide, and the average price paid per PC has remained fairly steady — until now with commodity computers.

Exponential growth, when plotted on a "normal" graph, produces a J-shaped (or a hockey-stick-shaped) curve. (The previous, Red Line graph did not have a "normal" vertical scale but a logarithmic one, explained below.) Please refer to the EXPONENTIAL-VERSUS-NATURAL-GROWTH GRAPH and the sketch on its left. The exponential rises slowly at first, then ever more steeply (rapidly), until it goes almost straight up. Moore’s Law and the growth of the semiconductor and PC industries appear exponential like this so far, though Moore’s Law growth is faster (has a steeper curve) than the industries’. Moore’s Law will soon break down for semiconductors, and some leading companies will fail; but the industries will keep growing (on cheap commodity computers, embedded processors, and so on).

To the right of the J-curve, you see the future of semiconductor complexity and related industries. Note that the formula for the S-curve, or logistic, is different than the simple exponential formula of Moore’s Law. The J-curve soon will turn into an S-curve, or logistic curve, representing natural growth. As a human approaches late adolescence, growth slows down and eventually stops, as shown on the right. The same is true of technologies and industries. Each of them has its own particular S-curve. The slowdown will come sooner for IC complexity than for the industries.

MOORE’S LAW IS SUPPLY-SIDE ECONOMICS

Moore’s Law’s main importance has been as a business plan. Moore’s Law basically has been supply-side economics applied to semiconductors and computing. Intel deliberately has supplied excess processing power (which has had exponential growth) — a mainstay of its business plan — and Microsoft and users have generated demand to eat it up. Supply and demand (a real law, of economics) have been in balance most of the time.

When Intel’s supply of processing power has exceeded the demand, the semiconductor industry has suffered recessions until new demand was generated by a new related industry — notably the PC and the Internet.

DIFFUSION AND EVOLUTION OF A TECHNOLOGICAL PRODUCT

I. ACCEPTANCE
Major companies market it.

II. STANDARDIZATION W/ MIN.
ELECTRONICS EXAMPLES: 5-tube (All-American Five) superhet radio, "lunchbox" portable, NTSC color TV, VHS videotaping standard.
COMPUTER EXAMPLES: x86 microprocessor, DOS, PC and clones, Windows, bus standards, laptop and notebook size and screen-in-lid format.

III. COMMODITIZATION W/ MIN.
EXAMPLES: Cheap shirt-pocket Japanese radios of 1960s, emerging $150-$200 portable PCs for the billions in Asia (see PHOTO), cheap Linux software.

CHARACTERISTICS OF ELECTRONICS COMMODITY (final stage above):

A. LOW PRICE: Price is the main specification.

B. ASIANIZATION: Radio manufacturing to Japan in late 1950s. Computers to China in early 2000s. Elsewhere as wages go up in China. Cheap labor often beats automation for cost-cutting.

C. MINIATURIZATION: Saves on materials in product, fuel for shipping across the Pacific, electricity/battery use.

D. UTILITY: A must-have like the light bulb, which everyone uses for reading and writing without paying much attention to it. Standardization (II above) allows it to be connected anywhere in a national grid. Computers are becoming a utility like this: Their grid is the Internet, and computer programs are coming to be used on the Internet on a pay-as-you-go basis, like electricity.

E. OUTGROWS PROPRIETORS: A small business outgrows its proprietors (Ben and Jerry have to hire professional managers). In the same way, computing is outgrowing the Wintel (Microsoft-Intel) partnership. Brands (like Intel and Microsoft) are losing their value, and related stock market prices will, too.

THE RADIO EXAMPLE

Smaller-Cheaper-Simpler (aka miniaturization-commoditization) has been the path of electronics progress since the beginning. It is important because it will guide the future, long after Moore’s Law is a footnote. So we present it next.

PROGRAMMING A HOME RADIO (1924)

The antique radio in the ATWATER KENT PHOTO cost about $100 in 1924, the same year IBM was born. That is equivalent to about $1145 in 2006. Instead of one tuning dial, such radios had two or three. They all had to be tuned to the same frequency, for example, 650 kHz to get WSM and the Grand Ole Opry in Nashville. One complication was that the dials read 1-100 instead of in frequencies like 650 kHz. The user would set a dial to perhaps 60, another to 58, and perhaps a third to 62. The radio listener had to list these tricky, precise numerical settings like program steps to return to the same frequency. _ http://www.jimsradios.250x.com/ak10a-page.htm#tune
– http://home.earthlink.net/~moores-law/
(And you thought programming a video recorder was a chore.)

TRANSISTOR SISTER

Long before iPods, little transistor radios gave a generation of youth a way to take their music, which soon (1955) became rock and roll, with them and away from their parents. Bardeen, Brattain, and Schockley had invented the transistor in 1947, but Haley and Presley finally made it sell (helped by the movie "Blackboard Jungle").

LOOK, MA, NO HANDLES! (FIRST RADIO TO HOLD IN THE PALM OF YOUR HAND)

The first commercial transistor radio was American-made, not a Sony. The Regency TR-1 of 1954 (SEE REGENCY TR-1 PHOTO), had four transistors. (Note the printed-circuit board. Today, inside ICs, the connecting "wires" are still printed, but the transistors are too, fully harnessing the power of printing.) Most of these were not transparent but red, etc. The shirt-pocket size Regency was 5 inches high and weighed 12 ounces. The old tube Atwater Kent model 20 was 26 inches wide and weighed about 18 pounds (a "compact" model 20-C version was 20-inches wide and weighed about 14 pounds). The Regency transistor radio was 24 times lighter and 4 or 5 times smaller than the Atwater Kent tube radio of 30 years earlier.

Of course the transistor radio, with only two controls, was vastly simpler to operate, just as computers will get.

HEDONICS: BANG-FOR-THE-BUCK PRICING

According to one *hedonic* price study (that of Aizcorbe in 2000), the annual price decline in a similar period to that studied by Berndt was 31 percent for desktops and 26.3 percent for notebooks. (See left bars in PRICE-DECLINES BAR GRAPH.) Now this hedonic pricing is close to Moore’s Law. To fall by a factor of 2 (to one half) in 2 years (Moore’s Law), the price would have to fall about 29.3 percent per year (0.707 x 0.707 = 0.5 = 1/2).

Most other hedonic price indexes for PCs give similar results. Of course, economists also know about Moore’s Law. I am not saying that their work is fraudulent, but it could be prejudiced by Moore’s Law. Whether they know it or not, all they are "measuring" is Moore’s Law for prices. A hedonic index could be made to follow any reasonable course by picking by the right computer characteristics and assigning the right weights (importance and value) to them.

Actual prices, however, (see the bars on the right in the PRICE-DECLINES BAR GRAPH) don’t come close to following Moore’s Law. However, it is likely that the roles on the left and right in the BAR GRAPH soon will be reversed: It is processor/computer improvements (left side) that will be in single digits, and Unit Prices — what you pay — thankfully and finally, will tend to fall at the Moore’s Law rate.