Will We Keep Getting More Bits For The Buck?

For three decades, the computer and semiconductor industries have thrived on the confounding economics of chipmaking. Every three years, the cost doubles for "wafer fabs," the ultraclean factories that fabricate chips on silicon wafers: It now stands at $1 billion. Yet the big investments have paid off by making possible still-tinier circuitry that further slashes the cost of computing. With chipmakers delivering four times the processing speed and memory capacity at roughly the same price every three years, the market has been gobbling silicon like teenagers scarfing potato chips.

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