Moore’s Law GDP Value in the Economy

Summary : How the Moore’s Law raises income in relationship to the economies of the United States and the World.


Valuing Moore’s Law in the Economy: While the value of Moore’s Law may be inexorable from GDP productivity, there are other ways to measure it:

Deflation Value to Income: Deflation has an inverse effect on real income. Real income takes out inflation, converting income to constant dollars. So, when deflation is accounted for in the price of goods that people buy, their effective real income goes up (that’s a technical way to say your money goes further when prices go down). Previously I wrote that the deflation value of Moore’s Law on semiconductors amounted to $67.8B last year. Scale that up to the effect on electronics and it comes to almost half-a-Trillion dollars. A savings of $0.5T is equal to 3% of US GDP.  

Market Value: What about the market value of the companies that would not (or would barely) exist without it? Companies like ASML, Applied Materials, Teradyne, Intel, TSMC, Qualcomm, Apple, IBM, HP, Samsung, Google and Facebook to name a few. The market value of the companies across the spectrum of technology driven by Moore’s Law amounted to $13 Trillion in 2014. That magnitude of asset-rich wealth is equal to three-quarters of the entire economy of the United States. Another way to put it is that one-fifth of the asset value in the World’s economy would be wiped out if the Integrated Circuit had not been invented and Moore’s Law never happened.


 Originally published February 13, 2015, in VLSIresearch's The Chip Insider

Author: G Dan Hutcheson

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