venture summit 2014, ron reedy
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San Diego Venture Group's Venture Summit 2014, with guest speaker Ron Reedy.TRANSCRIPT
The End of Moore’s Law
Or, “Peak Oil Transistors”
Semiconductor Business Basics
Hi, I’m Ron and I’m a CMOS-aholic
Semiconductors 101 In 2013 the entire, worldwide semiconductor industry achieved about
$300B in revenues and ~4% growth Walmart achieved $466B, or 50% more
Semi OI = 10-15%; Walmart OI = 3-4%
China had twice the growth rate
Oil industry was about $10T
New fabrication plants, “fabs,” cost about $5B and only a handful of companies can even consider owning one In 1973, a new mask aligner cost about 1 MY (~$35k)
Today, an EUV stepper costs about 1,000 MY (~$100M)
State-of-art chips using these technologies require thousands of design engineers And about 2X as many software engineers
A modern chip costs about $100M to develop, plus ramp-up costs
3
Multiplier Effect of Semi’s
Semiconductor $
content of most
systems is 2-20%
• System revenue
>>10X system cost
Total leveraged
impact is ~>10T$
Half of this driven by
10 companies!
Comparable to the oil
industry
Inherently the
backbone of any
information system
4
Similarities to Oil Industry, i.e., a Mature Industry
Majors dominate
production and revenues
Efficiency, scale and access to
capital are crucial
The “easy oil” elephant fields
have been found
We are in a broad peak
Wildcatters (start-ups) find
new opportunities
Lots of dry holes
Looking for a gusher
Deploy fracking
Niche opportunities are the
most defensible (WD40)
5
What’s Wrong with this Picture?
There is >$10T of
profitable value
created by
semiconductors
Driven by $3T of
profitable electronic
systems
All supported by
$0.3T of transistors
worth 20% less every
year (Moore’s Law)
So does this look
stable? $10T
$3T
$0.3T
6
History of Moore’s Law
1.E+00
1.E+01
1.E+02
1.E+03
1.E+04
1.E+05
1.E+06
1.E+07
1.E+08
1.E+09
1.E+10
1.E+11
1960 1970 1980 1990 2000 2010 2020
Re
lative
Un
its
Transistors/chip
Transistor/$
Fab cost
The party’s over!
7
Peak Transistors (per $)
Speed of Intel μP’s peaked in 2004
28 nm will be the cheapest node
according to: Broadcom Global Foundries nVidia ST Micro ASML
And that’s 2/3 of Moore’s Law in the
history books
8
What Moore’s Law Really Says
The number of transistors has grown from 1 (which
won a Nobel Prize) to 2 (another Nobel Prize) to
almost 100 B
Steam engines and miles of rail grew about 9-10
orders of magnitude, then collapsed by an order of
magnitude with introduction of new technologies
Moore’s Law is now in uncharted territory
i.e., it is over
We have been addicted to ever cheaper transistors
for 50 years
~20 generations
11 orders of magnitude (100,000,000,000 X)
This is about equal to 5% money supply growth since
Columbus discovered the Americas (~1500)
What does this portend?
9
Crossing the Rubicon: Transistor Costs
are Rising
So what is the impact of each successive node increasing in
cost by 10-30%?
Compare this to the original 4X cost reduction per node (~3Y)
It will require “EUV,” a euphemism for soft XRAY, lithography
The difficulty and cost of this development is why Cymer was acquired
The electronics industry is addicted to rapid declines in
transistor costs and short replacement cycles
“Have you seen the new whizbangmatron at Fry’s?,” followed by
“I can’t wait ‘til those are less than $1,000”
Combined, these market responses create a volume-driven
virtuous cycle, all of which is based on declining transistor costs
IC cost has overwhelmed other inflationary pressures
10
Potential Implications
World GDP
If electronics systems drive $10T/Y in total turnover, or about 20% of
world GDP, then flat IC-derived revenues causes 1% lower GDP
growth
About 50% of all IC’s are shipped into China for product assembly,
so half of the total $ impact will fall on China
Could reduce China’s GDP growth to that of a developed country
Geopolitical
America won the Cold War and the post-Soviet competition largely
with Si-based technology (GPS, smart weapons, consumerism, etc.)
What if our lead stagnates, or even shrinks? (Satchel Paige: “Don’t look
back; something might be gaining on you”)
What else changes now that we cannot rely on cheaper transistors?
Is this the equivalent of the “peak oil” concept?
We’ve seen massive changes in world economics as the “easy oil”
era passed into history ($2.50/bbl, before the ‘72 oil embargo)
Is there an equivalent to fracking that changes things (for a while)?
11
Potential Implications, II
Entrepreneurism
Gotta love it! All problems are opportunities
Entrepreneurs require dislocations (ask the mammals, or Gordon Moore
himself)
Research & Development
New ways to deliver enhanced performance per transistor
“The Cloud” reuses centralized computer assets instead of billions of
discrete platforms
“The network is the computer,” Sun Micro
More efficient use of transistors
Cell phones subsumed the following:
GPS, MP3/DVD player, still camera, movie camera, calculator,
dictaphone, landline, encyclopedia, wristwatch, alarm clock, timer,
personal computer, flashlight, routers, etc
Is there any new technology that can extend the Si growth curve?
12
Conclusions
The primary attribute of Moore’s Law,
exponentially cheaper transistors, is no
longer in effect
We can see it happening but its impact will
become obvious over the next 3-5 years
This change will affect everything we do
Options:
Enjoy it while it lasts
Dig a hole and insert your head
Develop and deploy follow-on alternatives
Adapt to a world of “peak transistors”
13
Thank You
Ron Reedy
A personal perspective