work—in effect making Moore’s Law a self-fulfilling prophecy.4 For Moore’s Law be self-fulfilling, competitors need to believe that potential technological “showstoppers” and other impediments can be effectively overcome in the near to intermediate term. While experts predict that it is possible to remain on the trajectory envisioned by Moore’s Law for another 10 to 15 years, this outcome is not inevitable.5

Sustaining Moore’s Law is important because the production and use of semiconductors are major contributors to the growth and dynamism of the U.S. economy. Semiconductor technologies underpin a variety of products ranging from electronic devices such as personal computers and mobile phones, to business solutions and services, to e-commerce through the Internet.6 Through their pervasive use and rapid improvement, semiconductors have become technological enablers, allowing major improvements in established products as well as new innovations from consumer electronics (like the iPod) to new medical technologies, to new business processes.

The Committee’s focus on semiconductors is based on the central role semiconductors have played and continue to play in the rapid development and better performance of information technologies. Semiconductors are not only a key driver of the performance improvements in information technology, they are unusual in that these performance improvements continue even as costs of computers and other devices keep declining. This in turn has had a positive impact (though one that is hard to measure) on productivity in software development.

To sustain benefits of the new, more productive economy, the Committee recommends a number of policy measures. They include:

Retaining a Vibrant U.S. Information Technology Industry

The structure of the semiconductor, computer, and software industries is changing, with some production as well as advanced R&D moving offshore, creating new opportunities but also new challenges for U.S. leadership. Globalization clearly offers many benefits such as 24/7 product development, high-quality and lower-cost R&D, and lower-cost manufacturing of components and final products. Yet, as more manufacturing and related research and development move outside the United States, the United States risks losing the critical mass necessary for its


Ana Aizcorbe, “Moore’s Law, Competition, and Intel’s Productivity in the Mid-1990s,” American Economic Review, 95:305-308, 2005.


See remarks by Robert Doering, “Physical Limits of Silicon CMOS Semiconductor Roadmap Predictions,” in National Research Council, Productivity and Cyclicality in Semiconductors: Trends, Implications, and Questions, Dale W. Jorgenson and Charles W. Wessner, eds., Washington, D.C.: The National Academies Press, 2004.


European Semiconductor Industry Association, The European Semiconductor Industry 2005 Competitiveness Report. Accessed at <>.

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