Long-term productivity mechanisms of the semiconductor industry

A small set of business and technology relationships can characterize the continuous upward revenue growth of the semiconductor industry. An essential success metric has been functional cost or "productivity." Falling functional cost is assumed to be responsible for the continuously growing demand for electronics and semiconductor products. In addition to the well-known productivity measure, $/transistor, other functional cost metrics are described that play a role in the semiconductor industry's continued success. In the future, additional productivity enhancements will be required to keep functional costs dropping at historical rates (and the industry continuing to grow), and some existing mechanisms may become ineffective. Key productivity mechanisms are assessed for their effectivity. The International SEMATECH Industry Economic Model used throughout this analysis is described.