Moore's

IC Cost
Law
A Guide for Understanding

Page 3-4 WHAT IS MOORE'S LAW?

Pages 5-6 HISTORY OF MOORE'S LAW

Pages 7-8 HOW DOES MOORE'S LAW

Pages 13-16 IS MOORE'S LAW DEAD?

Pages 17-21 UNDERSTANDING IC COST

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What is Moore's
law?
 The number of transistors in a
computer chip doubles roughly
every two years.
 As the number of transistors
increases, so does processing
power.
 As the number of transistors
increases, the cost per
transistor falls.
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What is Moore's
law?
 Moore's Law implies that computers,
machines that run on computers, and
computing power all become smaller,
faster, and cheaper with time, as
transistors on integrated circuits become
more efficient.
 Widely regarded as one of the hallmark
theories of the 21st century, Moore’s
Law carries significant implications for
the future of technological progress—
along with its possible limitations.
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History of Moore's Law
In 1965, Gordon E. Moore, the co-founder of
Intel, made this observation that became
known as Moore's Law.
Gordon Moore did not call his observation
"Moore's Law,". nor did he set out to create
a "law." Moore made that statement based
on noticing emerging trends in chip
manufacturing at Fairchild Semiconductor.
Eventually, Moore's insight became a
prediction, which in turn became the golden
rule known as Moore's Law.
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History of Moore's Law
In the decades that followed Gordon Moore's
original observation, Moore's Law guided the
semiconductor industry in long-term planning
and setting targets for research and
development (R&D). Moore's Law has been a
driving force of technological and social
change, productivity, and economic growth that
are hallmarks of the late 20th and early 21st
centuries.
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How does Moore's Law
works?
◇ Moore’s law is based on empirical observations made
by Moore. The doubling every year of the number of
transistors on a microchip was extrapolated from
observed data.
◇ Over time, the details of Moore’s law were amended to
better reflect actual growth of transistor density. The
doubling interval was first increased to two years and
then decreased to about 18 months. The exponential
nature of Moore’s law continued, however, creating
decades of significant opportunity for the
semiconductor industry. The true exponential nature of
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Moore’s law is illustrated by the figure below.
A straight-line plot of the logarithm of a function indicates an
exponential growth of that function. The figure is courtesy of Intel
8 Corporation
Benefits of Moore's Law
Computing, Electronics, and All other Sectors
Benefits in Computing
As transistors in integrated circuits become more
efficient, computers become smaller and faster.
Chips and transistors are microscopic structures
that contain carbon and silicon molecules, which
are aligned perfectly to move electricity along the
circuit faster. The faster a microchip processes
electrical signals, the more efficient a computer
becomes. The cost of higher-powered computers
has been dropping annually, partly because of
10 lower labor costs and reduced semiconductor
Benefits in Electronics
Practically every facet of a high-tech
society benefits from Moore's Law in
action. Mobile devices, such as
smartphones and computer tablets would
not work without tiny processors; neither
would video games, spreadsheets,
accurate weather forecasts, and global
positioning systems (GPS).
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Benefits in Other Sectors
Moreover, smaller and faster
computers improve transportation,
health care, education, and energy
production—to name but a few of
the industries that have progressed
because of the increased power of
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computer chips.
Is Moore's Law
dead?

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This, in fact, is not occurring. While Moore’s law
is still delivering exponential improvements, the
results are being delivered at a slower pace.
The pace of technology innovation is NOT
slowing down, however. Rather, the explosion
of hyperconnectivity, big data, and artificial
intelligence applications has increased the
pace of innovation and the need for “Moore’s
law-style” improvements in delivered
technology.
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For many years, scale complexity
drove Moore’s law and the
semiconductor industry’s
exponential technology growth.
As the ability to scale a single chip
slows, the industry is finding other
methods of innovation to maintain
exponential growth.

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Experts agree that computers should reach the
physical limits of Moore's Law at some point in the
2020s.
In a 2005 interview, Moore himself admitted that
"...the fact that materials are made of atoms is the
fundamental limitation and it's not that far
away...We're pushing up against some fairly
fundamental limits so one of these days we're going
to have to stop making things smaller."
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Understanding IC
Cost
There have been many debates around the final
cost of an IC. Over the years the misconception
and failure to agree on what the calculated IC
? cost would be. The reason for this is that ICs are
a simple concept anymore. Technology moves
at an extremely fast pace and chip designers
have to keep up with this when calculating the IC
cost.
Equation
Experts have noted that there is a very
simple equation one can use in order to
determine the final chip cost:

Final IC cost = Package cost + Test

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IC Cost equation
This equation then takes care of all the necessary factors that have the hugest
impact on the production of the chip. Of course there are other factors that
might be calculated into this standard calculation. For example, shipping costs
can also be factored in. This includes things like shipping, handling, ERP
system, trays and boxes, insurances, and other costs that you need to
consider.
The most important element to keep in mind when calculating IC costs is the
price may change during manufacturing process due to several reasons. The
most obvious reason is that some price elements are not yet set. For example
yield and testing time. Also, technical decisions that are made during the
manufacturing process can have a huge impact on the economic status of the
project. The only way to make sure that you are calculating an accurate IC cost
is to understand that some things are still open.
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References:
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◇ [Link]

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