Venture Summit 2014, Ron Reedy

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

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

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  • 1. The End of Moore’s Law Or, “Peak Oil Transistors”
  • 2. Semiconductor Business Basics Hi, I’m Ron and I’m a CMOS-aholic
  • 3. 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
  • 4. 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
  • 5. 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
  • 6. 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 $0.3T 6
  • 7. History of Moore’s Law 1.E+00 1.E+01 1.E+02 1.E+03 1.E+04 1.E+05 1.E+06 1.E+07 1.E+08 1.E+09 1.E+10 1.E+11 1960 1970 1980 1990 2000 2010 2020 RelativeUnits Transistors/chip Transistor/$ Fab cost The party’s over! 7
  • 8. 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
  • 9. 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
  • 10. 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
  • 11. 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
  • 12. 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
  • 13. 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
  • 14. Thank You  Ron Reedy  A personal perspective