NEW YORK (
TheStreet) -- Since 1982, I have been writing about Moore's Law, the idea that semiconductor chips can get better-and-better, faster-and-faster. (
(INTC) now maintains the original 1965 Gordon Moore article
But there has always been a corollary, what I call Moore's Second Law. As chips get more complex the cost of building a plant to make them, called a fabrication plant or "fab," also rises.
Thus in this century Moore's Second Law has caused chip companies to go "fabless." Most of America's new chip leaders, like Qualcomm (QCOM) and Nvidia (NVDA), are absolutely fabless. (Qualcomm's market cap recently passed that of Intel.) Intel's most dangerous competitor, ARM Holdings (ARMH), does nothing more than license chip designs to others, like the A5 chip in your iPhone. It's essentially a software house.
Moore's Second Law has had another impact: Most production has moved to the Far East. Even Intel and Texas Instruments (TXN), the best-known American chipmakers, have plants there. The center of the chip-making world is now Hsinchu, Taiwan, 90 minutes from Taipei by road, the home base of Taiwan Semiconductor.In the age of devices, Intel is being killed at both ends. On the design end, fab-less outfits can deliver custom designs that give phone and tablet companies control of their customers. On the production end, TSMC has cost advantages. So when Apple (AAPL) decided recently it had to diversify away from Samsung for components,
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV