The Day Tech Dies?

These days, I worry a lot about inflated valuations and burn rates creeping up.

What I probably worry about the most is volatile public markets keeping founders from launching IPOs.

But these concerns pale in comparison to what some scientists are saying.

Listen to them and you’d think that tech progress is about to stop in its tracks.

They’re saying a momentous change is just around the corner. And that it could keep technology from advancing at its current pace.

Some of the biggest tech companies in the world say there’s no avoiding it.

This sounds serious. And ominous.

Problem is, it’s not true. Well, only partly true.

An important moment for technology is coming up. They got that right.

But not as soon as they’ve been predicting.

And, just as important, without the dire consequences attached.

The Power of Moore’s Law

At worst, technology progress may pause or temporarily slow. But that pause won’t pay us a visit for another 10 years.

That’s at least how much longer Moore’s Law will continue to drive chip performance and all the new products and businesses coming out of smaller and smaller chips.

Moore’s Law describes a simple dynamic: Smaller and smaller chips doing more and costing less.

It’s what has kept the semiconductor industry rolling along with exciting new products year after year. Since 1971, when Intel’s first-generation microchip was introduced, to Intel’s latest chip…

It has increased chip performance by 3,500 times. Has made chips 90,000 more energy efficient. And has lowered cost by 60,000 times.

But Moore’s Law is not really a law. Nor is it a prediction.

It’s more of an observation, made by Gordon Moore. Moore is the co-founder of Intel and Fairchild Semiconductor.

He wrote an article in 1965 titled “Cramming more components onto integrated circuits.” In it, he said that the number of components per chip would double every year for at least another 10 years.

So where is chip performance now, some 50 years later?

This past July, Intel CEO Brian Krzanich said, “Our cadence today is closer to 2 1/2 years than two” because of the “the technical challenges of shrinking transistors.”

In a September New York Times article titled “Smaller, Cheaper, Faster, Over,” Henry Samueli, chief technology officer for Broadcom, agreed… sort of.

“Moore’s Law is graying, aging,” he says. “It’s not dead, but you’re going to have to sign Moore’s Law up for AARP.”

But it’s what Gordon Moore himself said that’s hard to ignore.

In a March 2015 special report, “50 Years of Moore’s Law,” he says, “We won’t have the rate of progress that we’ve had over the last few decades. I see Moore’s law dying here in the next decade or so.”

Could this be it? Is this game-changing moment really at hand?

The 7-Nanometer Breakthrough

It took five years, $3 billion and 10 distinct major breakthroughs.

But IBM did it. It created the first 7-nanometer chip.

One nanometer is one-billionth of a meter, far too small to be visible to the naked eye.

Consider that a human hair is about 80,000-100,000 nanometers wide.

Transistors on this 7-nanometer chip are seven-billionths of a meter in length. Or 1,400 times smaller than a human hair.

Today’s best chips use 22-nanometer and 14-nanometer technology.

Developing a working 7-nanometer technology wasn’t easy. Some even thought it was impossible.

Shrinking chips to 7 nanometers led to subpar performance and offset the usual benefits that smaller chips had provided in the past.

Only after ditching conventional R&D methods was IBM able to drastically reduce chip size.

About 20 billion transistors will be etched on to each of these chips. Their arrival will extend “faster, better and cheaper” for at least another generation.

What Happens Next?

Technologists predict Moore’s Law will fizzle out by the middle of next decade.

That’s when the shrinking size of transistors bumps up against the laws of physics. Transistors will be composed of just a handful of molecules, too small to be reliable.

It’ll mark the end an era during which consumers reaped the benefits of increasingly powerful and smaller life-changing products (if you’re a Startup Investor subscriber, see my post “The Supercomputer in Your Pocket”).

What comes next?

Hard to say. It may not be a smooth transition. There may be a pause. Perhaps the pace of technology change slows temporarily.

But, I assure you, the end of this era will not be the end of innovation.

Artificial intelligence or a dozen other things could take over as the main driver of technology.

I don’t know which. Nobody does.

And there’s the rub…

The fear of the unknown. And the uncertainty it creates.

But I do know this. Hundreds if not thousands of bright, creative technologists will be working on a solution.

Many are working on it right now. We don’t know their names or the names of their startups.

But they’re out there. And they’ll continue to create hundreds of new businesses in markets from cloud computing to mobile products.

Transitioning from one technology era to another is a rare event. After all, Moore articulated his Moore’s Law half a century ago.

Such transitions drip with opportunity. Who will emerge as the next Intel? Google? Apple?

To help me find out, I visit startup investing portals (for example, here) to view the latest from tech startups.

I also periodically check into Intel Capital. Intel Capital invests $300 million to $400 million each year into tech startups. Its portfolio now has 316 holdings boasting several successful exits. Needless to say, Intel is keenly interested in potentially game-changing semiconductor startups.

Click here to take a look for yourself. It’s a great way to track the latest technology and user trends – and the startups in the middle of both.

Invest early and well,

Andrew Gordon
Founder, Early Investing