Information Technology and the Firm 539Moore’s Law, which predicts that the density of the components on a com-
puter chip will double every 18 to 24 months, thereby doubling the chip’s pro-
cessing power. This hypothesis has proven to be very accurate. Exhibit 16.1
shows the growth of the various Intel CPU chips that have powered the per-
sonal computer and many other machines. As can be seen, the PC’s power has
just about doubled every 18 to 24 months.
This growth can be seen more dramatically when the graph is plotted
logarithmically, as in Exhibit 16.2.
EXHIBIT 16.1 Moore’s Law—charting the power of the growth of
the PC.
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
YearMIPS (millions of instructionsper second)01002003004005006007008009001000EXHIBIT 16.2 Moore’s Law—charting the growth of the PC
(logarithmically).
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
YearMIPS (millions of instructionsper second)0.11.010.0100.01000.0