Ed Sperling, None
It’s been 45 years since Moore’s Law was first created and nearly four decades since the introduction of the personal computer. Unlike most industries, though, the semiconductor industry that powers all the technology inside businesses–as well as everything we touch–has shown none of the signs of a maturing industry.
Every time there is a hint of consolidation, new companies flood the market. Anytime there are technical hurdles they get solved. Why is this industry different, and will Moore’s Law run out of steam anytime soon? To find out, Forbes caught up with Walden Rhines, chairman and chief executive officer of
Forbes: Why hasn’t the semiconductor industry followed the usual pattern of consolidation?
Rhines: The largest companies in the semiconductor industry have only had modestly declining market share almost throughout the history of the industry. The reason: new applications keep coming along to grow the market, but the companies that lead in one application may not lead in another. A company like
Is that unusual for maturing industries?
Not all industries consolidate when they mature, but in semiconductors the unit volume continues to grow while the cost per unit continues to come down. In most industries the cost per unit doesn’t decrease. In semiconductors, decreasing costs per transistor makes new applications possible. Ten years ago your child may have wanted an MP3 players with 1,000 songs. Today a child may want 100 videos for roughly the same price.
The cost of computers has come down, though. Is that strictly because of semiconductors?
That’s a large share of the cost. Labor is a very small percentage. The material costs are about half of the total. On the desktop, [prices of] displays and keyboards keep coming down, too. Incidentally the unit volume of computers grows about 10% per year. That unit volume growth helps lower the cost and provide for new applications.
Everyone quotes Moore’s Law for smaller, faster and cheaper. Is it still applicable?
In the past everyone would migrate to smaller and smaller feature sizes because it cost less per transistor. We’re at a point where it’s so difficult to shrink everything that the cost may not decrease anymore, or at least it may not decrease very much. But there are other alternatives to cut costs. You can stack silicon die on top of each other. Moore’s Law will become irrelevant eventually, but there will be other things to drive down the cost.
Define feature size.
That refers to how wide the wires are on a circuit that connects things together. Typically they’re about a thousandth of the diameter of a human hair. As we shrink them, we can put more transistors on a single chip.
Is part of this maturing also a move away from companies making all the components of a chip themselves?
Yes, and that’s true for a lot of industries. In computers
Aren’t there fewer companies manufacturing the chips, though?
Yes. There’s growth in companies in each specialty, but the number of vertically integrated companies that design and manufacture products is decreasing as a percentage of the revenue of the industry. Memory companies still do design and manufacturing. So does
How much is being done in software rather than hardware these days?
Software has been increasing substantially. A large share of the products in the market today use the same chip but different software to run a different function.
Does that blur the definition between hardware and software companies?
If you look at a company like Qualcomm, they make chips, complex embedded software, as well as applications that may be used in a handheld device. What’s changed is that you don’t have to do it all. You can farm out some of that work to be done in parallel, or you can take a chip designed for another application and through software customize it for something totally different.
Has the timing for when these pieces have to be ready changed the market?
Not really. One of the reasons companies like
There’s been a big push to multicore processors in the enterprise. Can software take advantage of that?
The challenge of multiprocessing has been around for decades. Parallelism is difficult. Companies like
Why are we dealing with this in the first place?
Processors were on a steady curve upward until we hit about 3GHz. After that they had to add more cores because they couldn’t turn up the speed anymore. It would heat up to the point where it wouldn’t operate predictably.
Are there any new materials to solve that?
There are some solutions. The speed that electrons travel in gallium arsenide is faster than silicon. You can get a higher speed that way. You can also use silicon germanium as an alternative, but ultimately these materials have a finite limit. Either thermal effects or other limitations prevent you from running them faster.
What about using light instead of electricity?
Integrated optics have been worked on by a lot of companies, but they’re still too expensive. Light as a data transmission medium is quite pervasive. Undersea cables and data communications rely on it. It’s just a question of how long it takes to get efficient integration of those optics into a chip and how you channel light signals around a chip. A chip that uses optics may be different than what we use today.
Does the stuff that’s been developed for decades become a limiting factor in technology development?
People resist change. If they can solve new problems with established technology, they will. What’s so fascinating about semiconductors is the change continues to be quite rapid and that forces people to change just to get a competitive capability or to develop a new application.
Isn’t that change somewhat tempered by patents these days?
Yes. In 1947
Ed Sperling is the editor of several technology trade publications and has covered technology for more than 20 years. Contact him at email@example.com.