A:

Moore's Law, framed by Intel co-founder Gordon Moore, continues to have a significant impact on the electronics sector as the fundamental principle that guides the course of modern computing and the semiconductor industry. The law is based on Moore's prediction that the number of components on a computer chip would double every two years. More accurately, Moore predicted that the number of transistors placed on a single square inch of an integrated circuit chip would double every two years.

Industry Implications of Moore's Law

Moore's Law was first published in Electronics magazine in 1965 when he was a founder and director of research at Fairchild Semiconductor. While he did not pay much heed to his own predictive statement, it continues to stand as a technological benchmark for the semiconductor industry. The importance of the law to semiconductor manufacturers is evident. The semiconductor manufacturing industry has created a predictive roadmap that spans nearly five decades from 1971 through 2020. This set of documents is titled "The International Technology Roadmap for Semiconductors." This roadmap was established by five geographic regions that represent nearly all chip manufacturers. Consequently, all decisions about future product releases and research efforts are based on the two-year window of Moore's Law.

Economic Implications of Moore's Law

One of the economic impacts of the law is that computing devices continue to show exponential growth in complexity and computing power while effecting a comparable reduction in cost to the manufacturer and the consumer. Interdisciplinary bodies such as the Materials Research Society continue to feature improvements and innovations in the process of chemical mechanical planarization, an abrasive cleaning technique used in manufacturing integrated circuits that optimizes the cost and efficiency of the chip. Consequently, the lowered cost of manufacturing and the increased reliability of new technology nodes has resulted in significant improvement in the equity and operating profits of the semiconductor industry and, as a result, the electronics sector.

The far-reaching implications of Moore's Law are seen in the growth of cloud computing and social media technologies, which require increased computing capabilities and are directly responsible for the demand for more components on a single chip. The economic relationship between equipment manufacturers that support the industry, chip manufacturers and the consumer market continues to be influenced by the industry's ability to keep pace with the conditions of Moore's Law.

The importance of this law is underlined by the fact that it has caused a technological migration from microelectronics to nanoelectronics and created an industry segment -- nanotechnology -- that is experiencing exponential growth. This migration has also resulted in exponential interest in new areas, including nanomaterials and new optimization technologies for semiconductor manufacture. Despite reports that the law may be "slowing down," it remains the guiding law of the industry today.

RELATED FAQS
  1. What commodities are the main inputs for the electronics sector?

    Explore the use of commodities in the electronics sector. Discover potential risks and opportunities presented by raw materials ... Read Answer >>
  2. What are some examples of inelastic goods and services that are not affected by the ...

    Find out how the laws of supply and demand function for goods and services considered highly inelastic, including goods not ... Read Answer >>
  3. What are direct costs of sales?

    Learn about direct costs of sales and cost of goods sold (COGs), what direct costs of sales measures and how to calculate ... Read Answer >>
  4. What is the growth rate of the electronics sector?

    Read some projections about the growth rate of the electronics sector. Find out which products are primed to be responsible ... Read Answer >>
Related Articles
  1. Investing

    Fidelity Investments Fund Manager Upbeat About Bonds

    Fidelity Investments fund manager Jeff Moore is upbeat about bonds for the first time in a while.
  2. Investing

    Expect More Upside from Micron: Morgan Stanley

    Analysts say an ongoing supply shortage could propel the chipmaker nearly 40%, past its 2014 high.
  3. Investing

    'Double Ordering' Hurts Chip Cos.: Morgan Stanley

    One bear expects upside for broad-based chip suppliers to be more measured in Q1.
  4. Investing

    2018 Will Be Mixed for Chipmakers: Morgan Stanley

    After an ‘exceptional’ 2017, the outlook on memory remains mostly negative, but with exceptions.
  5. Investing

    The world's top 10 semiconductor companies

    Discover how some of the most successful companies in the semiconductor industry are well-known brands while others are thriving in relative obscurity.
  6. Investing

    Inside Intel: A Look At The Mega Chipmaker

    There's a very good chance that you've utilized an Intel chip today. Here's how the chipmaker became so ubiquitous.
  7. Trading

    Weakness in Chip Stocks Is Creating a Buying Opportunity

    Nearby support and strong underlying uptrends on the charts of key semiconductor stocks suggest that now could be the time to buy.
  8. Investing

    AMD Stock Turns Negative for the Year

    AMD's stock turned negative for the year after Morgan Stanley raised fresh concerns about its growth prospects.
  9. Investing

    USD vs. SOXL: Comparing Leveraged Semiconductor ETFs

    Discover and compare two semiconductor exchange-traded funds. Learn about their purpose, strategy, characteristics and investor suitability.
RELATED TERMS
  1. Moore's Law

    Moore's Law is the observation made by Intel co-founder Gordon ...
  2. Morris Chang

    The founder, chairman and CEO of Taiwan Semiconductor Manufacturing ...
  3. Law Of Large Numbers

    In statistical terms, a rule that assumes that as the number ...
  4. Lawful Money

    Lawful money is any form of currency issued by the United States ...
  5. Elder Law

    Elder law is a legal specialty focusing on the rights and needs ...
  6. Blue Chip

    A blue chip is a nationally recognized, well-established, and ...
Hot Definitions
  1. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  2. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  3. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  4. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
  5. Relative Strength Index - RSI

    Relative Strength Indicator (RSI) is a technical momentum indicator that compares the magnitude of recent gains to recent ...
  6. Dividend

    A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
Trading Center