The Origin of Moore's Law and What it May (Not) Teach Us About Biological Technologies

While writing a proposal for a new project, I've had occasion to dig back into Moore's Law and its origins.  I wonder, now, whether I peeled back enough of the layers of the phenomenon in my book.  We so often hear about how more powerful computers are changing everything.  Usually the progress demonstrated by the semiconductor industry (and now, more generally, IT) is described as the result of some sort of technological determinism instead of as the result of a bunch of choices -- by people -- that produce the world we live in.  This is on my mind as I continue to ponder the recent failure of Codon Devices as a commercial enterprise.  In any event, here are a few notes and resources that I found compelling as I went back to reexamine Moore's Law.

What is Moore's Law?

First up is a 2003 article from Ars Technica that does a very nice job of explaining the why's and wherefore's: "Understanding Moore's Law".  The crispest statement within the original 1965 paper is "The number of transistors per chip that yields the minimum cost per transistor has increased at a rate of roughly a factor of two per year."  At it's very origins, Moore's Law emerged from a statement about cost, and economics, rather than strictly about technology.

I like this summary from the Ars Technica piece quite a lot:

Ultimately, the number of transistors per chip that makes up the low point of any year's curve is a combination of a few major factors (in order of decreasing impact):

  1. The maximum number of transistors per square inch, (or, alternately put, the size of the smallest transistor that our equipment can etch),
  2. The size of the wafer
  3. The average number of defects per square inch,
  4. The costs associated with producing multiple components (i.e. packaging costs, the costs of integrating multiple components onto a PCB, etc.)

In other words, it's complicated.  Notably, the article does not touch on any market-associated factors, such as demand and the financing of new fabs.

The Wiki on Moore's Law has some good information, but isn't very nuanced.

Next, here an excerpt from an interview Moore did with Charlie Rose in 2005:

Charlie Rose:     ...It is said, and tell me if it's right, that this was part of the assumptions built into the way Intel made it's projections. And therefore, because Intel did that, everybody else in the Silicon Valley, everybody else in the business did the same thing. So it achieved a power that was pervasive.

Gordon Moore:   That's true. It happened fairly gradually. It was generally recognized that these things were growing exponentially like that. Even the Semiconductor Industry Association put out a roadmap for the technology for the industry that took into account these exponential growths to see what research had to be done to make sure we could stay on that curve. So it's kind of become a self-fulfilling prophecy.

Semiconductor technology has the peculiar characteristic that the next generation always makes things higher performance and cheaper - both. So if you're a generation behind the leading edge technology, you have both a cost disadvantage and a performance disadvantage. So it's a very non-competitive situation. So the companies all recognize they have to stay on this curve or get a little ahead of it.

Keeping up with 'the Law' is as much about the business model of the semiconductor industry as about anything else.  Growth for the sake of growth is an axiom of western capitalism, but it is actually a fundamental requirement for chipmakers.  Because the cost per transistor is expected to fall exponentially over time, you have to produce exponentially more transistors to maintain your margins and satisfy your investors.  Therefore, Intel set growth as a primary goal early on.  Everyone else had to follow, or be left by the wayside.  The following is from the recent Briefing in The Economist on the semiconductor industry:

...Even the biggest chipmakers must keep expanding. Intel todayaccounts for 82% of global microprocessor revenue and has annual revenues of $37.6 billion because it understood this long ago. In the early 1980s, when Intel was a $700m company--pretty big for the time--Andy Grove, once Intel's boss, notorious for his paranoia, was not satisfied. "He would run around and tell everybody that we have to get to $1 billion," recalls Andy Bryant, the firm's chief administrative officer. "He knew that you had to have a certain size to stay in business."

Grow, grow, grow

Intel still appears to stick to this mantra, and is using the crisis to outgrow its competitors. In February Paul Otellini, its chief executive, said it would speed up plans to move many of its fabs to a new, 32-nanometre process at a cost of $7 billion over the next two years. This, he said, would preserve about 7,000 high-wage jobs in America. The investment (as well as Nehalem, Intel's new superfast chip for servers, which was released on March 30th) will also make life even harder for AMD, Intel's biggest remaining rival in the market for PC-type processors.

AMD got out of the atoms business earlier this year by selling its fab operations to a sovereign wealth fund run by Abu Dhabi.  We shall see how they fare as a bits-only design firm, having sacrificed their ability to themselves push (and rely on) scale.

Where is Moore's Law Taking Us?

Here are a few other tidbits I found interesting:

Re the oft-forecast end of Moore's Law, here is Michael Kanellos at CNET grinning through his prose: "In a bit of magazine performance art, Red Herring ran a cover story on the death of Moore's Law in February--and subsequently went out of business."

And here is somebody's term paper (no disrespect there -- it is actually quite good, and is archived at Microsoft Research) quoting an interview with Carver Mead:

Carver Mead (now Gordon and Betty Moore Professor of Engineering and Applied Science at Caltech) states that Moore's Law "is really about people's belief system, it's not a law of physics, it's about human belief, and when people believe in something, they'll put energy behind it to make it come to pass." Mead offers a retrospective, yet philosophical explanation of how Moore's Law has been reinforced within the semiconductor community through "living it":

After it's [Moore's Law] happened long enough, people begin to talk about it in retrospect, and in retrospect it's really a curve that goes through some points and so it looks like a physical law and people talk about it that way. But actually if you're living it, which I am, then it doesn't feel like a physical law. It's really a thing about human activity, it's about vision, it's about what you're allowed to believe. Because people are really limited by their beliefs, they limit themselves by what they allow themselves to believe what is possible. So here's an example where Gordon [Moore], when he made this observation early on, he really gave us permission to believe that it would keep going. And so some of us went off and did some calculations about it and said, 'Yes, it can keep going'. And that then gave other people permission to believe it could keep going. And [after believing it] for the last two or three generations, 'maybe I can believe it for a couple more, even though I can't see how to get there'. . . The wonderful thing about [Moore's Law] is that it is not a static law, it forces everyone to live in a dynamic, evolving world.

So the actual pace of Moore's Law is about expectations, human behavior, and, not least, economics, but has relatively little to do with the cutting edge of technology or with technological limits.  Moore's Law as encapsulated by The Economist is about the scale necessary to stay alive in the semiconductor manufacturing business.  To bring this back to biological technologies, what does Moore's Law teach us about playing with DNA and proteins?  Peeling back the veneer of technological determinism enables us (forces us?) to examine how we got where we are today. 

A Few Meandering Thoughts About Biology

Intel makes chips because customers buy chips.  According to The Economist, a new chip fab now costs north of $6 billion.  Similarly, companies make stuff out of, and using, biology because people buy that stuff.  But nothing in biology, and certainly not a manufacturing plant, costs $6 billion.

Even a blockbuster drug, which could bring revenues in the range of $50-100 billion during its commercial lifetime, costs less than $1 billion to develop.  Scale wins in drug manufacturing because drugs require lots of testing, and require verifiable quality control during manufacturing, which costs serious money.

Scale wins in farming because you need...a farm.  Okay, that one is pretty obvious.  Commodities have low margins, and unless you can hitch your wagon to "eat local" or "organic" labels, you need scale (volume) to compete and survive.

But otherwise, it isn't obvious that there are substantial barriers to participating in the bio-economy.  Recalling that this is a hypothesis rather than an assertion, I'll venture back into biofuels to make more progress here.

Scale wins in the oil business because petroleum costs serious money to extract from the ground, because the costs of transporting that oil are reduced by playing a surface-to-volume game, and because thermodynamics dictates that big refineries are more efficient refineries.  It's all about "steel in the ground", as the oil executives say -- and in the deserts of the Middle East, and in the Straights of Malacca, etc.  But here is something interesting to ponder: oil production may have maxed out at about 90 million barrels a day (see this 2007 article in the FT, "Total chief warns on oil output").  There may be lots of oil in the ground around the world, but our ability to move it to market may be limited.  Last year's report from Bio-era, "The Big Squeeze", observed that since about 2006, the petroleum market has in fact relied on biofuels to supply volumes above the ~90 million per day mark.  This leads to an important consequence for distributed biofuel production that only recently penetrated my thick skull.

Below the 90 million barrel threshold, oil prices fall because supply will generally exceed demand (modulo games played by OPEC, Hugo Chavez, and speculators).  In that environment, biofuels have to compete against the scale of the petroleum markets, and margins on biofuels get squeezed as the price of oil falls.  However, above the 90 million per day threshold, prices start to rise rapidly (perhaps contributing to the recent spike, in addition to the actions of speculators).  In that environment, biofuels are competing not with petroleum, but with other biofuels.  What I mean is that large-scale biofuels operations may have an advantage when oil prices are low because large-scale producers -- particularly those making first-generation biofuels, like corn-based ethanol, that require lots of energy input -- can eke out a bit more margin through surface to volume issues and thermodynamics.  But as prices rise, both the energy to make those fuels and the energy to move those fuels to market get more expensive.  When the price of oil is high, smaller scale producers -- particularly those with lower capital requirements, as might come with direct production of fuels in microbes -- gain an advantage because they can be more flexible and have lower transportation costs (being closer to the consumer).  In this price-volume regime, petroleum production is maxed out and small scale biofuels producers are competing against other biofuels producers since they are the only source of additional supply (for materials, as well as fuels).

This is getting a bit far from Moore's Law -- the section heading does contain the phrase "meandering thoughts" -- I'll try to bring it back.  Whatever the origin of the trends, biological technologies appear to be the same sort of exponential driver for the economy as are semiconductors.  Chips, software, DNA sequencing and synthesis: all are infrastructure that contribute to increases in productivity and capability further along the value chain in the economy.  The cost of production for chips (especially the capital required for a fab) is rising.  The cost of production for biology is falling (even if that progress is uneven, as I observed in the post about Codon Devices).&nb sp; It is generally becoming harder to participate in the chip business, and it is generally becoming easier to participate in the biology business.  Paraphrasing Carver Mead, Moore's Law became an organizing principal of an industry, and a driver of our economy, through human behavior rather than through technological predestination.  Biology, too, will only become a truly powerful and influential technology through human choices to develop and deploy that technology.  But access to both design tools and working systems will be much more distributed in biology than in hardware.  It is another matter whether we can learn to use synthetic biological systems to improve the human condition to the extent we have through relying on Moore's Law.