Moore's Law

AAA

DEFINITION of 'Moore's Law'

An observation made by Intel co-founder Gordon Moore in 1965. He noticed that the number of transistors per square inch on integrated circuits had doubled every year since their invention. Moore's law predicts that this trend will continue into the foreseeable future.


Although the pace has slowed, the number of transistors per square inch has since doubled approximately every 18 months. This is used as the current definition of Moore's law.

BREAKING DOWN 'Moore's Law'

Because Moore's law suggests exponential growth, it is unlikely to continue indefinitely. Most experts expect Moore's law to hold for another two decades. Some studies have shown physical limitations could be reached by 2017.

RELATED TERMS
  1. 80-20 Rule

    A rule of thumb that states that 80% of outcomes can be attributed ...
  2. Critical Mass

    A very important or crucial stage in a company's development, ...
  3. Long-Term Growth - LTG

    An investing strategy or concept where a security will appreciate ...
  4. New Economy

    A buzzword describing new, high-growth industries that are on ...
  5. Organic Growth

    The growth rate that a company can achieve by increasing output ...
  6. Growth Rates

    The amount of increase that a specific variable has gained within ...
Related Articles
  1. Trading Strategies

    Riding The Momentum Investing Wave

    Buy high and sell higher. Find out if you could surf these risky waters.
  2. Markets

    Is Growth Always A Good Thing?

    Getting big quickly looks good, but companies can get into trouble when they do it too fast. Find out how to spot this trouble.
  3. Markets

    Great Company Or Growing Industry?

    Look at the big picture when choosing a company - what you see may really be a stage in its industry's growth.
  4. Investing Basics

    The Christmas Saints Of Wall Street

    Learn how some of world's richest people spread holiday cheer year-round.
  5. Trading Strategies

    Einstein's Stock Tips: Gravity and Growth

    Can applying the theory of relativity help you pick a stock? Find out more here.
  6. Investing Basics

    What's a Price-Taker?

    Price-taker is an economic term describing a market participant who has no effect on overall market activity.
  7. Fundamental Analysis

    Is India the Next Emerging Markets Superstar?

    With a shift towards manufacturing and services, India could be the next emerging market superstar. Here, we provide a detailed breakdown of its GDP.
  8. Term

    Estimating with Subjective Probability

    Subjective probability is someone’s estimation that an event will occur.
  9. Economics

    Explaining Replacement Cost

    The replacement cost is the cost you’d have to pay to replace an asset with a similar asset at the present time and value.
  10. Investing Basics

    Understanding the Modigliani-Miller Theorem

    The Modigliani-Miller (M&M) theorem is used in financial and economic studies to analyze the value of a firm, such as a business or a corporation.
RELATED FAQS
  1. What level of research and development compares to sales is typical in the electronics ...

    The electronics sector averages spending 8 to 10% of sales revenue on research and development, although the semiconductor ... Read Full Answer >>
  2. What impact does Moore's Law have on the electronic sector?

    Moore's Law, framed by Intel co-founder Gordon Moore, continues to have a significant impact on the electronics sector as ... Read Full Answer >>
  3. What is the utility function and how is it calculated?

    In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >>
  4. How can I use a regression to see the correlation between prices and interest rates?

    In statistics, regression analysis is a widely used technique to uncover relationships among variables and determine whether ... Read Full Answer >>
  5. How do I calculate a modified duration using Matlab?

    The modified duration gauges the sensitivity of the fixed income securities to changes in interest rates. To calculate the ... Read Full Answer >>
  6. How do I calculate the rule of 72 using Matlab?

    In finance, the rule of 72 is a useful shortcut to assess how long it takes an investment to double given its annual growth ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
  2. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
  3. Tiger Cub Economies

    The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that ...
  4. Gorilla

    A company that dominates an industry without having a complete monopoly. A gorilla firm has large control of the pricing ...
  5. Elephants

    Slang for large institutions that have the funds to make high volumes trades. Due to the large volumes of stock that elephants ...
  6. Widow's Exemption

    In general terms, a widow's exemption refers to the amount that can be deducted from taxable income by a widow, thereby reducing ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!