venture summit 2014, ron reedy

14
The End of Moore’s Law Or, “Peak Oil Transistors”

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San Diego Venture Group's Venture Summit 2014, with guest speaker Ron Reedy.

TRANSCRIPT

Page 1: Venture Summit 2014, Ron Reedy

The End of Moore’s Law

Or, “Peak Oil Transistors”

Page 2: Venture Summit 2014, Ron Reedy

Semiconductor Business Basics

Hi, I’m Ron and I’m a CMOS-aholic

Page 3: Venture Summit 2014, Ron Reedy

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

Page 4: Venture Summit 2014, Ron Reedy

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

Page 5: Venture Summit 2014, Ron Reedy

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

Page 6: Venture Summit 2014, Ron Reedy

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

Page 7: Venture Summit 2014, Ron Reedy

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

Page 8: Venture Summit 2014, Ron Reedy

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

Page 9: Venture Summit 2014, Ron Reedy

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

Page 10: Venture Summit 2014, Ron Reedy

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

Page 11: Venture Summit 2014, Ron Reedy

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

Page 12: Venture Summit 2014, Ron Reedy

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

Page 13: Venture Summit 2014, Ron Reedy

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

Page 14: Venture Summit 2014, Ron Reedy

Thank You

Ron Reedy

A personal perspective