In Bloomberg View, Virginia Postrel looks at the latest “Moore’s Law is over” notions:
Semiconductors are what economists call a “general purpose technology,” like electrical motors. Their effects spread through the economy, reorganizing industries and boosting productivity. The better and cheaper chips become, the greater the gains rippling through every enterprise that uses computers, from the special-effects houses producing Hollywood magic to the corner dry cleaners keeping track of your clothes.
Moore’s Law, which marked its 50th anniversary on Sunday, posits that computing power increases exponentially, with the number of components on a chip doubling every 18 months to two years. It’s not a law of nature, of course, but a kind of self-fulfilling prophecy, driving innovative efforts and customer expectations. Each generation of chips is far more powerful than the previous, but not more expensive. So the price of actual computing power keeps plummeting.
At least that’s how it seemed to be working until about 2008. According to the producer price index compiled by the Bureau of Labor Statistics, the price of the semiconductors used in personal computers fell 48 percent a year from 2000 to 2004, 29 percent a year from 2004 to 2008, and a measly 8 percent from 2008 to 2013.
The sudden slowdown presents a puzzle. It suggests that the semiconductor business isn’t as innovative as it used to be. Yet engineering measures of the chips’ technical capabilities have showed no letup in the rate of improvement. Neither have tests of how the semiconductors perform on various computing tasks.
