Gordon Moore said‚ on the 40th anniversary of his law that “Moore’s law is really about economics.” What did he really mean by that? In 1965 when Gordon Moore put forth Moore’s law based on his observation, those years were Golden years of Free Market Capitalism in America. The entire decade of 1950s and 60s was a Golden Era of Free Market Capitalism. As the taxes were high on richest Americans, the taxes on middle class Americans were very low. As middle class Americans paid low taxes, they had a very high consumer purchasing power and hence they generated a high domestic consumer demand. US Economy was not something to worry about for Gordon Moore at the time when he made his famous observation.

What has happened since 1970s is that in order to sustain the relentless progress of Moore’s law, semiconductor manufacturing moved to Japan for lower manufacturing costs. When Plaza Accord was signed in 1985 because of huge problems with US Balance of Payment deficits from its Free trade with Japan, Japanese economy crashed. Hence, In order to sustain Moore’s law , US Semiconductor Industry had to find an alternative low cost manufacturing location to keep manufacturing costs down. The low labor costs in Asia acted as an incentive to move semiconductor manufacturing to China and South East Asia.

This also transformed Integrated Device Manufacturer (IDM) business model of US Semiconductor industry into a Fabless business model. While Moore’s law kept progressing on the physical side by shrinking transistor dimensions, Macroeconomics was completely ignored by American businesses. The trade deficits and budget deficits both started to soar. Fabless business model was indeed a win-win for both pure-play foundries as well as Fabless semiconductor businesses. However, Since Fabless model resulted in twin deficits, sustaining US economy and hence Moore’s law became difficult.

What is to be done to sustain Moore’s law. Moore’s law has both Physical and Economical limits. Based on Moore’s observation, the shrinking dimensions of transistors would one day meet physical limits of scaling. It would not be possible shrink transistors any further. Does this mean that semiconductor industry will stop progress. Absolutely not!!! Human mind has time and time overcome all the technological challenges in shrinking transistor dimensions. While Solid state Physics could transition to quantum mechanics, it would not mean that Industry would stop progressing. Progress of science and technology has continued for last 50 years and it should continue for next 50 years and beyond to keep benefiting from shrinking transistor dimensions.

As pointed out, Over last 50 years Progress of Moore’s law has been scaling at all costs and ignoring Macro-economy in this process. No progress is sustainable without a sustainable macroeconomic progress. Hence, For Moore’s law to continue for next 50 years and beyond, it would not just need a progress on physical side but an equally good progress on economic side. Only when physics and economics succeed would Moore’s law succeed and can semiconductor industry continue to progress.

It took me almost one complete year to work on my upcoming book on ” The Macroeconomics of US Microelectronics Industry”. I am sure that my proposed ideas would lead to a sustainable progress on both physical and economic fronts. The proposed solutions would transform Crony monopoly Capitalism to Free market mass Capitalism. The proposed solutions would not just benefit semiconductor industry professionals but would greatly benefit even business leaders. It would have small but efficient government, low unemployment, stable economy, lower taxes, steady growth in corporate profits and end of speculations which result in bubble economy .

If semiconductor industry professionals are looking for above solutions for this great industry of ours as we continue to find ways to sustain the progress of Moore’s law, I would certainly recommend you to read my upcoming book. You can also visit my blog

https://apekmulay.com/macro-economics-in-micro-electronics-industry/

to keep yourselves updated on options for pre-ordering a copy my book. I shall make sure that my book is available to be read not just in standard hardback cover format but also in ebook formats like Amazon Kindle Edition, an Apple iPad/iPhone Edition, and a Barnes and Noble Nook Edition.

Be positive. The future is bright for our industry and Moore’s law will not come to an end anytime soon with my proposed solutions. These solutions are also applicable for other industries and hence it would be a good resource to transform the entire US economy to a Free market economic system.