If you applied Moore’s Law to the auto industry, the speed of cars in 2012 should have been 3,25,000 miles per hour while they would have cost $0.05. But sadly, it is not so. On the other hand, the semi-conductor and related industries live by this law based on Intel co-founder Gordon Moore’s calculation that “the number of transistors incorporated in a chip will approximately double every 24 months”. In simple terms, smarter computers have resulted in the creation of even smarter and cheaper computers. So what where supercomputers in the 1960s are now powering small components in phones, even while the latter cost just a fraction of those large leviathans.
But there are chances that the steep rising curve of Moore’s Law, which was so far unaffected by economic or natural factors, could flatten soon. And ironically, this could happen because of the breakneck pace of innovation triggered by this very law. In fact, Moore himself had predicted that this “can't continue forever” as transistors would eventually reach the limits of miniaturisation at atomic levels. Chip makers seem to have reached that dreaded moment in their product cycles now with the cost per chip flattening and expected to grow by as much as 40% if they attempt further miniaturisation. An insight report from McKinsey suggests that with the next-generation nodes cost increases would be driven by extreme investments required for leading-edge lithography technologies and the process complexities involved. It is a Catch-22 situation, as the industry does not have the luxury of stalling innovation as any lack in performance increase would certainly hit demand. The big question now is whether they will keep pushing for smaller, more efficient chips even if that means higher costs that go against the very grain of what they have lived on for many decades.