Every semiconductor industry professional should have enjoyed listening to Bob Colwell’s discussion about end of Moore’s law. If not, I would highly recommend watching his presentation here and also listen to his replies in the Q&As that follow.
Bob Colwell has pointed out several interesting and thought provoking ideas in his Q&A. He has provided an indirect insight into reasons why Intel did not get early into the mobile business. As he mentions the ones who are at high level in decision making for those huge financial decisions should also take into consideration the architectural benefits of new designs. Unfortunately, As per him Intel’s culture does not support it.
My take is that alongwith reforms in macroeconomy, the business models of semiconductor industry also have to udergo reforms in order to surpass the economic limits of Moore’s law. Intel would not have been late to enter the mobile market if its management had been more encouraging to get inputs from its engineers. Engineers understand technology much better than most board of directors, who primarily make financial decisions for company. If the business model of industry is reformed such that employees have a say in operation of a business, today Intel would have been a dominant competitor to Qualcomm, Broadcom and other fabless players in the smart phone market. In that case, Intel’s engineers would have been able to influence decisions of management about upcoming technological decisions and needed financial investments. But, Today we are noticing layoffs at Intel and idle time increase for its fabs.
Bob points to a very important life blood of business which is the ability of a semiconductor company to forecast economic demand but does not offer any insight as to why companies fail at it. Common sense macroeconomics teaches us that the ability to forecast demand for products needs establishment of a true free market economy. Only in a free market enterprise system, the economic demand for various goods and services keeps rising with constantly increasing consumer purchasing power. The Consumer’s purchasing power being the true engine of economic growth is explained in my article ” A Failure Analysis of US Economy “.
Consumer purchasing power of citizens of any country also decides their standard of living. The standard of living of citizens cannot be very high if the purchasing capacity of the people remains very limited. Due to the reduced capacity for purchasing consumer goods, the import index of that country also remains lower than its export index or that country has to remain a satellite of a developed country. As a consequence of ignorance of this common sense macroeconomics, the balance of power in the world is also jeopardized and a possibility of war is always around the corner. We are already seeing such things happening around the world today. All are the results of ignorance of common sense macroeconomics.
When existing semiconductor industry business models are reformed so that they boost domestic consumer purchasing power by having the company management make decisions in best interest of its employees ( and hence the company ) rather than external investors on Wall Street, semiconductor industry and other industries also would be in much better position to forecast economic demand. Also, When such business model makes provisions for employees to have a say in operation of business alongwith the management, mistakes made by Intel management which led to their loss of mobile market share could have been avoided. All these solutions are possible only through Mass Capitalism. To understand how Mass Capitalism is truly a blueprint for economic revival of US economy and would help sustain progress of Moore’s law and hence the progess of semiconductor industry, consider pre-ordering the book “Mass Capitalism : A Blueprint for Economic Revival ” after reading book Synopsis (for a limited time special pre-order price). Thank You for recent pre-orders from around the world. You would be receiving an autographed copy of hardbound cover of my book with a dust jacket for this special low pre-order price.