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Moore's second law, also known as Rock's law, states that the cost of a semiconductor chip fabrication plant doubles every four years.
As the cost of computer power to the consumer falls, the cost for producers to fulfill Moore's law follows an opposite trend.
Research and Development (R&D), manufacturing and testing costs have increased steadily with each new generation of chips. Rising manufacturing costs are an important consideration for the sustaining of Moore's law. This had led to the formulation of Moore's second law, also called Rock's law, which is that the capital cost of a semiconductor lab increases exponentially over time.
Rock's law can be seen as the economic side to Moore's law which states that the number of transistors in a dense integrated circuit doubles every two years.
The latter is a direct consequence of the ongoing growth of the capital-intensive semiconductor industry.
Innovative and popular products mean more profits, meaning more capital available to invest in ever higher levels of large-scale integration, which in turn leads to creation of even more innovative products.
The semiconductor industry has always been extremely capital-intensive, with ever-dropping manufacturing unit costs. Thus, the ultimate limits to growth of the industry will constrain the maximum amount of capital that can be invested in new products.
At some point, Rock's Law will collide with Moore's Law.
It has been suggested that fabrication plant costs have not increased as quickly as predicted by Rock's law was stable in the late 1990s – and also that the fabrication plant cost per transistor may be more relevant as a constraint on Moore's Law.
Moore's second law has use as follows:
This sets the minimum investment in R&D and manufacturing needed over the next four years. A company has to double its investment in manufacturing costs every four years to make progress and stay competitive in the Industry.
This sets the minimum fund/ profit a company should earn to stay stable in market.