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The butterfly effect and Taiwan as the future IT hotspot

Global Equities

BNP Paribas Asset Management
 

Key Takeaways

  • Many industry experts have prophesied that Moore’s Law’s days and thus the exponential growth in computing power are numbered.
  • In July 2020, Intel announced that they were considering outsourcing production of the next generation of semiconductors. With this move, the company could potentially be abandoning any future pursuit of Moore’s Law.
  • Taiwan has become the world’s largest manufacturer of semiconductors and will become the ‘hottest hotspot’ from a geopolitical perspective.

Over the last half a century, Moore’s Law has been a key force driving global economic growth. Through prosperous times as well as times of instability, characterised by recession and political turbulence, Moore’s Law (see fact box) has been an underlying factor of this economic progress. It has given us cheaper and better PCs and smartphones. Moreover, it has enabled the development of both the internet and countless new business models. The smartphones that most of us now own are vastly more powerful than the world’s largest computer was 30 years ago. If it had been possible to make a mobile phone in 1991 as powerful as today’s iPhone XS, the cost of the basic components and chips would have amounted to around USD 28 million. The fact that you can buy a smartphone today for around USD 1,000 is thanks to the forces of Moore’s Law.

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