Moore suggested an exponential growth of the number of transistors in integrated electronic circuits. In this paper, Moore’s law is derived from a preferential growth model of successive production technology generations. The theory suggests that products manufactured with a new production technology generating lower costs per unit have a competitive advantage on the market. Therefore, previous technology generations are replaced according to a Fisher-Pry law. Discussed is the case that a production technology is governed by a cost relevant characteristic. If this characteristic is bounded by a technological or physical boundary, the presented evolutionary model predicts an asymptotic approach to this limit. The model discusses the wafer size evolution and the long term evolution of Moore’s law for the case of a physical boundary of the lithographic production technology. It predicts that the miniaturization process of electronic devices will slow down considerably in the next two decades. 1. Introduction The exponential growth of the number of transistors in integrated electronic circuits is known as Moore’s Law [1]. In order to derive Moore’s law, the paper develops an evolutionary model of successive production technologies. A large part of the evolutionary economic literature is devoted to the study of the economic consequences of innovation and technical change [2]. Initiated by Nelson and Winter [3], the Neo-Schumpeterian literature focusses on production technologies and routines, while the technological evolution is suggested to be governed by a fitness related to some sort of cost functions. It studies in particular technological and organizational opportunities [4, 5], while the impact of the market dynamics plays only a secondary role [6]. It is mediated by assuming a productivity-driven exogenous demand function or by postulating a population dynamics in evolutionary game theory. An attempt to take the market dynamics explicitly into account was based on the time evolution of firms [7]. In the presented evolutionary model, however, not firms but product variants manufactured with different production technologies are regarded to suffer from a preferential growth process. These product variants are the elementary units in a preferential growth process recognized independently by a number of researchers [8–13]. It is based on the idea that the demand side of a market is determined by the selection behaviour of potential buyers, while a key variable is the price. During the reproduction process, in order to make profit, the supply side responds
References
[1]
G. E. Moore, “Cramming more components onto integrated circuits,” Electronics, vol. 38, no. 8, pp. 114–117, 1965.
[2]
K. Dopfer, The Evolutionary Foundation of Economics, Cambridge University Press, Cambridge, UK, 2005.
[3]
R. R. Nelson and S. G. Winter, An Evolutionary Theory of Economic Change, Harvard University Press, Cambridge, Mass, USA, 1982.
[4]
G. Dosi and S. Winter, “Interpreting economic change: evolution, structures and games,” LEM Working Paper 2000-08, Laboratory of Economics and Management, Pisa, Italy, 2000.
[5]
U. Witt, “What is specific about evolutionary economics?” Journal of Evolutionary Economics, vol. 18, no. 5, pp. 547–575, 2008.
[6]
J. S. Metcalfe, “Accounting for economic evolution: fitness and the population method,” Journal of Bioeconomics, vol. 10, no. 1, pp. 23–49, 2008.
[7]
S. Winter, Y. Kaniovski, and G. Dosi, “A baseline model of industry evolution,” Journal of Evolutionary Economics, vol. 13, no. 4, pp. 355–383, 2003.
[8]
G. J. Tellis and C. M. Crawford, “An evolutionary approach to product growth theory,” Journal of Marketing, vol. 45, no. 4, pp. 125–132, 1981.
[9]
T. Modis, Predictions, Simon & Schuster, New York, NY, USA, 1992.
[10]
N. M. Victor and J. H. Ausubel, “DRAMs as model organisms for study of technological evolution,” Technological Forecasting and Social Change, vol. 69, no. 3, pp. 243–262, 2002.
[11]
E. D. Beinhocker, The Origin of Wealth, Harvard Business School Press, Boston, Mass, USA, 2006.
[12]
U. Cantner, J. J. Krüger, and R. S？llner, “Product quality, product price, and share dynamics in the German compact car market,” Jena Economic Research Papers 24, 2010.
[13]
J. Kaldasch, “Evolutionary model of an anonymous consumer durable market,” Physica A, vol. 390, no. 14, pp. 2692–2715, 2011.
[14]
P. P. Saviotti and G. S. Mani, “Competition, variety and technological evolution: a replicator dynamics model,” Journal of Evolutionary Economics, vol. 5, no. 4, pp. 369–392, 1995.
[15]
C. Versluis, “DRAMs, fiber and energy compared with three, models of market penetration,” Technological Forecasting and Social Change, vol. 69, no. 3, pp. 263–286, 2002.
[16]
R. Siebert, “Learning by doing and multiproduction effects over the life cycle: evidence from the semiconductor industry,” CEPR Discussion Paper 3734, 2003.
[17]
W. Kim and J.-D. Lee, “Measuring the role of technology-push and demand-pull in the dynamic development of the semiconductor industry: the case of the global DRAM market,” Journal of Applied Economics, vol. 12, no. 1, pp. 83–108, 2009.
[18]
S. Park, “An empirical evaluation of the 1986 Semiconductor Trade Arrangement,” Japan and the World Economy, vol. 21, no. 4, pp. 349–357, 2009.
[19]
R. Kapoor and R. Adner, “What firms make vs. what they know: how firms' production and knowledge boundaries affect competitive advantage in the face of technological change,” Organization Science, vol. 23, no. 5, pp. 1227–1248, 2012.
[20]
S. Lloyd, “Ultimate physical limits to computation,” Nature, vol. 406, no. 6799, pp. 1047–1054, 2000.
[21]
M. J. Bowden, “Moore's law and the Technology S-Curve,” Stevens Alliance for Technology Management, vol. 8, no. 1, pp. 1–4, 2004.
[22]
A. Aizcorbe and S. Kortum, “Moore's law and the semiconductor industry: a vintage model,” The Scandinavian Journal of Economics, vol. 107, no. 4, pp. 603–630, 2005.
[23]
G. D. Hutcheson, “The economic implications of Moore's law,” in Into the Nano Era, H. Huff, Ed., vol. 106, pp. 11–38, Springer, Berlin, Germany, 2009.
[24]
V. Peterka, “Macrodynamics of technological change: market penetration by new technologies,” IIASA Research Report RR-77-022, International Institute for Applied Systems Analysis (IIASA), Laxenburg, Austria, 1977.
[25]
J. C. Fisher and H. R. Pry, “A simple substitution model of technological change,” Technological Forecasting and Social Change, vol. 3, pp. 75–88, 1971.
[26]
B. la Fontaine, “Lasers and Moore's law,” SPIE Professional, 2010.
[27]
D. Sornette, Critical Phenomena in Natural Sciences, Springer, Berlin, Germany, 2006.
[28]
D. Ma and J. Mark, “The DRAM market structure: the rise and fall in concentration,” in Proceedings of the 8th Annual Cambridge International Manufacturing Symposium, M. Gregory and Y. Shi, Eds., Exploiting the Potential of International Supply Networks, Cambridge, UK, September 2003.
[29]
T. K. Choon, “The World DRAM Market,” in Proceedings of the VIA Technology Forum (VTF '04), Taipei, Taiwan, June 2004.
[30]
A. I. Kingon, J.-P. Maria, and S. K. Streiffer, “Alternative dielectrics to silicon dioxide for memory and logic devices,” Nature, vol. 406, no. 6799, pp. 1032–1038, 2000.
[31]
W. Neumueller, J. Alsmeier, G. Bronner, S. Ishibashi, and H. Klose, “DRAM technology for today's market and future DRAM generations,” in Proceeding of the 27th European Solid-State Device Research Conference (ESSDERC '97), pp. 49–56, Stuttgart, Germany, September 1997.
[32]
C. Marchetti, “Primary energy substitution models: on the interaction between energy and society,” Technological Forecasting and Social Change, vol. 10, no. 4, pp. 345–356, 1977.
[33]
A. Gruebler, The Rise and Fall of Infrastructures, Physica, Heidelberg, Germany, 1990.
[34]
A. Gruebler, Technology and Global Change, Cambridge University, Cambridge UK, 1998.
[35]
C. Hiroyuki and H. Norikazu, “Moore's law, increasing complexity and the limits of organization: the modern significance of Japanese chipmakers' DRAM business,” RETI Discussion Papers 08-E-001, Research Institute of Economy, Trade and Industry (RIETI), Tokyo, Japan, 2008.
