You’ve probably heard of Moore’s Law, the observation that semiconductors would get meaningfully faster and cheaper over time, improving computing power. But what about Flatley’s Law and Wright’s Law?
None of these observations of technological progress exactly qualifies as an immutable law of nature, like Newton’s theory of gravity, but they have helped pave the way for some of the most compelling advances of the last 50 years. And in doing so they have helped improve the lives of consumers and drive long-term opportunity for savvy companies and investors.
1. Moore’s Law and the proliferation of semiconductors
Intel co-founder Gordon Moore, while working as a researcher in the 1960s, somewhat famously observed that the number of transistors that fit onto an integrated circuit doubled roughly every 18 months to two years, effectively providing more processing power at the same cost. He further observed that there was no reason that progress couldn’t continue.
This was not exactly a law of science, like Newton’s gravitational law, but rather an aspirational one, providing engineers with a goal. “It’s really a matter of how much money you invest in R&D to try to reduce the transistor size,” notes equity investment analyst Isaac Sudit, who has been covering semiconductors for more than two decades and met Gordon Moore as a young analyst. “Now companies invest for a reason — to get a return on their investment. It turns out that industry economics evolved in such a way that enough profits were generated to maintain that pace of innovation. So, it became a self-fulfilling prophecy.”