I love technology, but it’s sometimes difficult to keep up with our fast moving industry as the breakthroughs, as they say, just keep coming. These are not small, incremental changes, but bone-crushing leaps forward. They are hard to believe and sometimes even harder to conceptualize.
To appreciate the changes in the key technologies used in NEI’s business it is useful to try to tie the progress to concepts that are a part of our daily lives, or perhaps cost reductions from an original starting point. So let’s take a moment to consider the components we deal with every day and how they have changed over the past few years.
Let’s start with the Intel processor. And for the sake of clarity I begin with the definition of a nanometer (nm) which, for reference purposes, is one billionth of a meter. And a nanosecond is one billionth of a second. Consider how much the processors we handle every day have changed:
- The processor technology has shrunk from 180 nm 1999 to 22 nanometers in 2011.
- More than 100 million 22nm transistors would fit on the head of a pin. They cannot measure how many 22nm transistors would fit on the side of a penny because there is far too much variation in the size of penny.
- A 22nm transistor can switch on and off more than 100 billion times a second. It would take you more than 2000 years to do this manually with a light switch.
- Compared to the 1971 4004 Intel processor, the 22nm Ivy Bridge processor is 4,000X faster; consumes 5,000X less power per transistor and is 50,000X cheaper per transistor.
If the auto industry had followed Moore’s Law as the processors have done, then:
- Speed would have increased from 81 mph in 1971 to 324 mph in 2012,
- Fuel economy would have gone from 36 mpg in 1971 to 130 mpg in 2012,
- The cost of a car would have dropped from $2,500 in 1971 to $.05 in 2012
Next we move on to disk drives, my personal favorite. The original disks were huge monsters, about the size of a US washing machine – each with its own 60 amp circuit to handle electrical surge when they started. And the disk drives looked like multiple plates glued together with a handle on the top. They really were monsters.
Disk drives are every bit as complicated as processors but, as there have been many more suppliers, the prices have always been under severe competitive and technical pressure – except during natural disasters such as the recent Thailand flooding!
In 1956 the cost of 1 megabyte of disk storage was $10,000! Twenty years later, at the beginning of 1987, a megabyte of disk sold for $90 and the magical $1 per megabyte was achieved by Maxtor in 2000, lowering the cost of 1 gigabyte to an unbelievable $10.01.
From this point forward the measurement changed from $ per megabyte to megabytes per cent. Five years later, in 2005, the cost ratio was 16.5 megabytes of disk for the handsome sum of a penny. By August 2010 it was 122 megabytes for the same penny, and it has continued to rise from there. And all of this has been on spinning media. Today we are just beginning to enter the age of solid state memory which will be faster and someday in the future, even cheaper.
And let’s not leave out memory, the final part of our technology trifecta. In 1957 a kilobyte of memory running at 10,000 ns cost $392.00 or 411 million dollars per megabyte! By the end of 1987 the cost had dropped to $163 per megabyte and if we fast forward to 2007 the cost of a megabyte of memory had dropped to .024 cents. Today the market rate for memory is roughly .005 cents!
Throughout this period the processors are computing ever faster, disks are spinning ever quicker and memory is simply accessing at lightning speed. When we speak of “price performance”, I don’t believe there is an industry that can match the progress that our industry has made in the last half century.
And I am very glad, that working with our key vendors, we continue to be privileged to be a part of it.