Samsung Wants Moore’s Law End, Analyst Says

Rather than fearing the future, Samsung may be looking forward to inventing it.

Samsung Electronics, the world’s largest smartphone maker, may be looking forward to the end of Moore’s Law as a way to gain a new competitive edge, according to Mehdi Hosseini, an analyst with Susquehanna International Group.

Moore’s Law, the observation by Intel co-founder Gordon Moore in 1965 that the number of transistors per surface area on a semiconductor doubles every year may be on its last legs, according to a KPMG survey of industry executives.

Rather than fearing the future, however, Samsung may be looking forward to inventing it, according to Hosseini. South Korea’s biggest company expects the crash of Moore’s Law to open competitive advantages in new technologies such as flexible displays as early as 2015, he says.

“The battleground will become very interesting next year,” Hosseini said in an interview with EE Times. “If Samsung is able to commercialize a flexible display, that’s going to be a game changer.”

Within the next two years, the competitive edge in the smartphone business will not be about the chips that go into handsets, he says. Instead, it will be about the display, user friendliness and form factor.

Samsung is preparing for that future through an agreement with Universal Display Corp. of the US that allows Samsung to use the US company’s technology to manufacture organic light-emitting diode (OLED) displays for a new generation of wearable devices that can be clipped on a wrist, according to Hosseini.

Apple Inc., which makes more than 90 percent of the profit in the smartphone business, would probably be the first company to feel the heat if Samsung’s bet comes true, Hosseini says. Apple, unlike Samsung, outsources all of its manufacturing.

That explains why LG Display, which supplies more than half of Apple’s flat screens, just a month ago signed an agreement with Universal Display similar to the Samsung pact, according to Hosseini.

“Apple is already thinking about next year,” Hosseini says. “Apple could be under pressure.”

Longer term, the implications of an end to Moore’s Law are far reaching, potentially affecting the huge multibillion-dollar ecosystem of companies that have grown up to support the silicon chip industry. Indeed, Samsung Electronics, the world’s second-largest chipmaker, faces a large impact should Moore’s Law stop in its tracks.

The biggest challenge the chip industry faces in the next three years is the rising cost of R&D, according to the KPMG survey. That challenge dovetails with other obstacles such as the high cost of capital equipment and achieving technology breakthroughs, such as those predicated on Moore’s Law, the survey added.

The potential end of Moore’s Law is reminiscent of the admonition from author and former hedge fund manager Nassim Nicholas Taleb that past performance is no indicator of future performance. The turkey that is fed by a farmer every morning for 1,000 days is unfortunately unable to foresee the day when the farmer comes with an axe, Taleb says, citing an earlier anecdote of the famous mathematician Bertrand Russell.

Perhaps it is time for more people in the chip industry to embrace change?

—Alan Patterson covers the semiconductor industry for EE Times from Taipei.