Relentless year-over-year improvements in integrated circuits don't come cheap. For years, these advances have been boosted in part by silicon foundries that invest in new technology by aggregating demand from design companies that don't have factories of their own. As of last summer, however, only one such "pure-play" foundry continues to pursue the latest silicon generation, along with two companies that also make their own chips. The dwindling of suppliers revives the longstanding question of how the industry can adapt as physical limits eventually make further shrinkage impossible (or impossibly expensive).
Still, the story sounds familiar. "Every time people say Moore's Law has finally hit the wall, people come up with new, innovative approaches to get around it," said Willy Shih, Robert and Jane Cizik Professor of Management Practice at Harvard Business School.