The miracle cadence of More Moore

The semiconductor industry, born around 1960, is a collection of companies that design and manufacture semiconductor devices. Despite being a cyclical sector, one never ceases to be amazed at the exponential conjecture called Moore’s Law  (named after Intel co-founder Gordon E. Moore) [1], which states that the number of transistors on integrated circuits doubles approximately every two years.

This exponential improvement provides massive economies of scale to the industry resulting in the rapid decline of computing costs to the consumers. The end result is the ubiquitous impact of digital electronics in all segments of the world economy, producing a force of technological and social change. Because of its staggering rate of price-performance improvement, changes in the market and innovation occur extremely rapidly. One major consequence of this rapid change is that established market strongholds can be displaced very quickly.

Design 2.0 – A rapid hardware “hack” uprising?

Now, five decades later, with increasing evidence on the bubbling up and sustaining of Design 2.0 [2], refreshingly new hardware engineering (along with the influence from the Web. 2.0) creativity is being unleashed. Design 2.0 can be loosely defined as a type of “maker movement” framework where instead of hardware design being inhibited by a complex, bureaucracy-ridden set of corporate design methodologies and standardized industry practices, rapid low-cost experimentation to reduce friction in innovation is encouraged.

This movement is assisted by a communal pool of tools (e.g., open source hardware specifications and customizations, hardware hackathons, accelerators, incubators, and crowdfunding sources) and private partnerships (e.g., joint research and development between nimble hardware and solution providers, and the occasional vertically integrated manufacturer), generally benefited from the proliferation and level-setting of global knowledge and networking through the Internet.

More Moore or More Than Moore?

When one reinforces the Design 2.0 framework with an analogous new development in the semiconductor technology space known as More than Moore, we begin to see the rapid uprising of potentially disruptive innovations and supply chain models where the boundaries of ownership and value extraction are blurred. The pervasion of More than Moore, where added value to devices is provided by incorporating functionalities that do not necessarily scale according to Moore’s Law [3] will influence the development of new integration platforms. This is especially true in the semiconductor assembly and packaging space given its relatively lower costs structure, less complicated technological needs, and a much more relaxed U.S. technology export law restriction as opposed to Silicon wafer fabrication technology. These factors will naturally lead to more global inclusion, especially from Asia, where it is increasingly known as the mecca for electronics assembly manufacturing and rapid hardware “hacking” activities.

Be afraid. Be very afraid.

Disruptive innovation, a term coined by Clayton Christensen [4], describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.

Christensen suggests that successful companies often place too much emphasis on customers’ current needs, and fail to adopt new technology or business models that will meet their customers’ unstated or future needs. He argues that such companies will eventually fall behind and be “disrupted”. The idea of the Innovator’s Dilemma stems from the fact that businesses (especially large, vertically integrated companies) will reject innovations based on the fact that customers cannot currently use them or the profit margin is too low to make a significant dent to their bottom line, thus allowing these ideas with great potential to go to waste until it becomes too late.

The Slow Boiled Frog

While More Than Moore packaging technology pursuits often involve new System-In-Package (SIP) and System-On-Package (SOP) concepts that disrupt traditional packaging approaches [see fig. 1], the Design 2.0 movement additionally gave rise to various rapid, experiments to disrupt traditional in-house or out-source assembly and test (OSAT) packaging houses. For example, in order to pack more into their ultra-thin MacBook Airs, Apple started to solder/pack microchips, memory, and solid-state drives (SSDs) directly into their motherboards without their traditional packaging architecture/housing from the respective suppliers. The same holds true for manufacturers of mobile devices such as smartphones, tablets, phablets, etc.

Fig. 1: SOP concept of system integration of components and ICs [5].

Fig. 1: SOP concept of system integration of components and ICs [5].

One can only expect large e-commerce companies like Amazon, Alibaba, and Xiaomi with large data storage needs for their integrated mobile product offerings and their data server farms to do the same in the near future, if they have not already done so. This approach also makes sense from a strategic intellectual property (IP) point of view since by experimenting on ways on how to extract innovation from adjacent supplier technology, they can secure strategic differentiation, whether that is in terms of user experience or their own system-level performance optimization.

The development of Design 2.0 and More Than Moore also help to create fertile ground for Internet of Things (IoT), machine-to-machine (M2M), and wearable technologies where many companies from many industries can imagine, develop, and find innovative growth opportunities. The applications are usually industry agnostic. Because of Innovator’s Dilemma in that these applications may not fit perfectly well anywhere within the company, exacerbated by relatively lower per unit profit margins, large companies are especially susceptible to their own success trap. At worst, these companies may be completely disrupted in terms of its existing offerings and at best, a significant portion of its value add may be extracted away by a small, nimble competitor, emerging from behind. In the IoT and M2M consumer spaces, disruptive innovations may not attempt to bring better packaging solutions but rather solutions that are not as good as, but which are simpler, more convenient, and less expensive than existing items.

Let chaos reign, then rein in chaos – repeatedly

There are no sure and fast way to prevent the Innovator’s Dilemma. All companies should always keep a pulse on upcoming technologies and applications in their primary and adjacent industries to maintain or increase competitive advantage. One proven way to help a large company understand and respond better to rapid changes is through the effective deployment of corporate entrepreneurship by architecting a nimble strategic design while paying attention and taking advantage of cultural and political forces within the organization.

Smart, large companies should champion disruptive ideas and business opportunities which, at that time, may not seem to fit perfectly well anywhere within the company. This will enable them to find their next breakthroughs and not miss out on key inflection points. The ability to recognize the potential of disruptive innovations rather than focusing merely on how large the “economic pie” is at the present moment is key to integrating the dots necessary to avoid being disrupted.

References

  • [1] G. E. Moore and others, “Cramming more components onto integrated circuits,” Electronics, 38: 8 (1965); reproduced in Proceedings of the IEEE, vol. 86, no. 1, pp. 82–85, 1998.
  • [2] R. Merritt, “Design 2.0: A New Moore’s Law,” EETimes, 08-Dec-2014.
  • [3] W. Arden, M. Brillouët, P. Cogez, M. Graef, B. Huizing, and R. Mahnkopf, “‘More-than-Moore’ White Paper,” International Technical Roadmap for Semiconductors, 2010.
  • [4] C. Christensen, The innovator’s dilemma: when new technologies cause great firms to fail, 1st ed. Cambridge, MA: Harvard Business School Press, 1997.
  • [5] R. R. Tummala, “Packaging: past, present and future,” in Electronic Packaging Technology, 2005 6th International Conference on, 2005, pp. 3–7.