Does Moore’s Law Mean the Price of Chips Is Always Going Down?


February 7, 2022

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As we’ve discussed previously on this blog, Moore’s Law has been massively important for how far wafers – and technology itself – has progressed since 1965. You may be wondering, though: has this advantage affected silicon prices?

To answer that question, we need to discuss Moore’s Law, and how its influence on wafers and chips has changed over time.

silicon prices are increasing

Moore’s Law

Every year, the number of transistors that can fit in a single area increases. This means that each individual computing chip can become smaller, more powerful, or both.

What Affects the Price of Silicon Chips?

Many different materials can be used to create wafers. Silicon is the most popular because of how prominent it is. In fact, it’s the second most prominent material on earth. This means the raw material itself only costs .96 per pound.

Instead of the price of raw materials, the real question is how much it costs to manufacture the transistors that comprise a chip. For decades, it was easy to put more transistors on a smaller surface. Along with making chips more powerful, this also meant you could get more chips from a single wafer.

Along with this trend, the wafers themselves also got larger. Essentially, the cost of producing a wafer was spread out across an ever-increasing number of chips.

While it’s still possible to decrease the size of transistors, we’re reaching a point where doing so doesn’t reduce the cost. This is because the manufacturing requirements are becoming increasingly complex. Wafers are still growing smaller and more powerful, but these factors won’t influence their price.

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