📈⏳ The broken bargain of Moore’s Law
The physics has been slowing for years. The economics may be catching up.
A couple of weeks ago, Bloomberg reported that TSMC had no plans to use ASML’s newest chipmaking machine – High-NA EUV (EUV stands for extreme ultraviolet) – through 2029, citing cost as the issue. This may be a big deal.
Moore’s Law was always two things: a physical observation about transistor density, and an economic bargain about cost. The physics has been slowing for years.
Is TSMC’s hesitation the first sign that the economics are reversing, too?
I. The bargain breaks
Semiconductor manufacturing experienced one of the steepest learning curves ever recorded in any industry. For five decades and 10 generations of technology, each more expensive tool delivered cheaper chips – reliably, every 18 to 24 months.
The consequences are everywhere around us. The smartphone in your pocket has more raw compute than a 1990s supercomputer and costs less. The cloud infrastructure that runs modern AI exists because each successive generation of chips was cheaper per operation than the last. Software could eat the world because the hardware kept getting cheaper.
The cost per transistor – the broadest measure of chip economics – stopped falling in 2011. The narrower measure that tracks what lithography itself delivers, transistors per wafer-dollar, kept improving for another decade, helped by the industry’s shift to extreme ultraviolet light (EUV) around 2019, a shorter wavelength that let chipmakers print finer features and restored the cost-down curve. Now it has reversed too. High-NA should be the next step in the bargain, but if the best customer won’t take it, the bargain doesn’t hold.
