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41126-piy-ch04-01.pdf_18891 - CHAPTER 4 Moores Law and More...

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Moore’s Law Chip performance per dollar doubles every 18 months. microprocessor The part of the computer that executes the instructions of a computer program. C H A P T E R 4 Moore’s Law and More: Fast, Cheap Computing, and What It Means for the Manager 1. INTRODUCTION L E A R N I N G O B J E C T I V E S After studying this section you should be able to: 1. Define Moore’s Law, WMD understand the approximate rate of advancement for other techno- logies, including magnetic storage (disk drives) and telecommunications (fiber optic transmission). 2. Understand how the price elasticity associated with faster / cheaper technologies opens new markets, creates new opportunities for firms and society, and can catalyze industry disruption. 3. Recognize and define various terms for measuring data capacity. 4. Consider the managerial implication of faster / cheaper computing on areas such as strategic planning, inventory, and accounting. Faster and cheaper—those two words have driven the computer industry for decades, and the rest of the economy has been along for the ride. Today it’s tough to imagine a single industry not impacted by more powerful, less expensive computing. Faster and cheaper puts mobile phones in the hands of peas- ant farmers, puts a free video game in your Happy Meal, and drives the drug discovery that may very well extend your life. 1.1 Some Definitions This phenomenon of ‘faster, cheaper’ computing is often referred to as Moore’s Law, after Intel co- founder, Gordon Moore. Moore didn’t show up one day, stance wide, hands on hips, and declare “behold my law”, but he did write a four-page paper for Electronics Magazine in which he described how the process of chip making enabled faster chips to be manufactured at cheaper prices [1] . Moore’s friend, legendary chip entrepreneur and CalTech professor, Carver Mead, later coined the Moore’s Law ” moniker. That sounded snappy, plus as one of the founders of Intel, Moore had enough geek cred for the name to stick. Moore’s original paper offered language only a chip designer would love, so we’ll rely on the more popular definition: chip performance per dollar doubles every 18 months (Moore’s original paper assumed two years, but many sources today refer to the 18-month figure, so we’ll stick with that). Moore’s Law applies to chips—broadly speaking, to processors and RAM chips, or the electronics stuff that’s made out of silicon [2] . The microprocessor is the brain of a computing device. It’s the part of the computer that executes the instructions of a computer program; allowing computers say, to run a web browser, word processor, video game, or virus. For processors, Moore’s Law means that next generation chips should be twice as fast in 18 months, but cost the same as today’s models (or from an- other perspective, in a year and a half, chips that are same speed as today’s models should be available for half the price).
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