What enables improvements in cost and performance to occur?

How do Improvements in Cost and Performance Occur (i.e., what are the design changes)?

2nd Session in MT5009

A/Prof Jeffrey FunkDivision of Engineering and Technology Management

National University of SingaporeA summary of these ideas can be found in 1) What Drives Exponential Improvements? California Management Review, Spring 20132) Technology Change and the Rise of New Industries, Stanford University Press, 20133) Exponential Change: What drives it? What does it tell us about the future? http://www.amazon.com/Exponential-Change-drives-

about-future-ebook/dp/B00HPSAYEM/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1391564750&sr=1-1&keywords=exponential+change

From doing R&D and better process and product designs?

From developing better materials?From increasing volumes?From learning in factories?From empowering workers?From having democracies?From working hard?From increasing pay of workers?

How do Improvements Occur?

These design changes can only be achieved if other things occur

R&D must be done and done well◦ Increases in volumes often lead to higher R&D spending

R&D workers must ◦ be empowered, paid well, and work hard

Other sessions show that ◦ rapid improvements occur in some technologies more than

others, why?◦ improvements often occur before commercial production

begins

This Session Focuses on Technical Design Changes that Enable Improvements

What Types of Design Changes Have Led to Improvements?

Understanding the design changes can help us understand how and when a new technology might become economically feasible◦Provides justification for rapid rates◦Helps us understand technologies for which rates of

improvement aren’t available For economic feasibility, we can also use the

term value proposition◦When does a new technology provide a superior

value proposition to some set (or an increasing number) of users

Session Technology1 Objectives and overview of course2 How do improvements in cost and performance occur?

3 How/when do new technologies become economically feasible?

4 Semiconductors, ICs, electronic systems5 Sensors, MEMS and the Internet of Things6 Bio-electronics, Wearable Computing, Health Care, DNA

Sequencers7 Lighting, Lasers, and Displays8 Human-Computer Interfaces, Wearable Computing9 Information Technology and Land Transportation10 Nano-technology and Superconductivity

This is Fifth Session of MT5009

OutlineValue Proposition and economic feasibilityHow do Improvements in Cost and

Performance Occur, i.e., what are the mechanisms? ◦Creating materials that better exploit physical

phenomena◦Geometrical scaling◦Some technologies directly experience

improvements through these two mechanisms while others indirectly experience them through improvements in specific “components”

Simple Definition of Value Proposition

Value to

the target market

Benefits tothe

target market

Price tothe

target market

= Relative to

A simple and clear statement of what the new technology provides and that the existing technology does not: better performance, features, or price

Such a statement involves performance (including features) and cost

Superior Value PropositionsMight involve lower priceHigher performance

◦Speed, ease of Use◦Durability, portability◦Maintainability◦Reliability, Aesthetics

Specific FeaturesYour projects should consider many aspects of

valueBut for this session, let’s simplify the discussion

and just focus on performance and price

Supply and Demand CurvesPrice and performance determine amount of

demand and supply◦Rising performance often leads to growing demand◦Falling price often leads to growing demand

This session focuses on how the improvements in the supply curve occurred◦What were the technical design changes that enabled the

supply curves to move?Next session discusses changes in supply curve in

more detail◦Minimum level of performance: level of performance

needed before technology diffuses◦Maximum level of price: level of price needed before

technology diffuses?

Quantity (Q)

Price (P)

q

p

Supply Curves Often Move Over Time as Technology Gets Cheaper (and often better performance)

Demand Curve

Supply Curve

Typical movement ofsupply curve over time Typical

movement of demandcurve over time





How do Improvements Occur…Creating materials (and their associated

processes) that better exploit physical phenomena

Geometrical scaling◦Increases in scale: e.g., larger production equipment,

engines, oil tankers◦Reductions in scale: e.g., integrated circuits (ICs),

magnetic storage, MEMS, bio-electronic ICsSome technologies directly experience

improvements while others indirectly experience them through improvements in “components” ◦Computers and other electronic systems◦Telecommunication systems

LEDs (Light Emitting Diodes)and OLEDs (Organic LEDs)

More Details on Materials for LEDs In 1962, GE’s Holonyak made red emitting GaAsP LED

◦ The output was very low (about 0.1 lm/W) Changing materials (to AlGaAs/GaAs) and incorporating

quantum wells, by 1980, increased output to 2 lm/W, about same as first filament light bulb invented by Thomas Edison in 1879◦ Output of 10 lm/W was achieved in 1990, and a red emitting

light AllnGaP/GaP-based LED reached an output of 100 lm/W in 2000

In 1993, Nakamura demonstrated InGaN blue LEDs◦ By adding additional indium, he produced green LEDs and, by

adding layer of yellow phosphor on top of blue LED, produced first white LED

◦ By 1996, Nichia developed the first white LED based on a blue monochromatic light and a YAG down-converter

Lasers are Like LEDs and Improvements in them (in this case new colors) come from creating new materials

http://upload.wikimedia.org/wikipedia/commons/4/48/Commercial_laser_lines.svg

Organic TransistorsNote the different material classes and the improvements for each of them

Huanli Dong , Chengliang Wang and Wenping Hu, High Performance Organic Semiconductors for Field-Effect Transistor, Chemical Commununications, 2010,46, 5211-5222

Energy Storage: Batteries

Sources: Koh and Magee, 2008; Naoi and Simon, 2008)

Capacitors. Note that energy density is a function of capacitance times voltage squared.

Note also the names of different materials

Sources: Koh and Magee, 2008; Renewable and Sustainable Energy Reviews 11(2007): 235-258

Flywheels. Note that energy density is a function of mass times velocity squared and

stronger materials (carbon fiber) enable higher speeds

Solar Cells

Superconductors

Structural and Heat-Resistant Materials

Improvements in corn yield through better seeds, fertilizers (materials) and other things

Magnetic materials (Coercivity and energy product)

Source: http://www.tdk.co.jp/magnet_e/superiority_02/

TechnologyDomain

Sub-Technology

Dimensions of measure

Different Classes of Materials

Energy Trans-formation

Lighting Light intensity per unit cost

Candle wax, gas, carbon and tungsten filaments, semiconductor and organic materials for LEDs

LEDs Luminosity per Watt

Group III-V, IV-IV, and II-VI semiconductorsOrganic LEDs Small molecules, polymers, phosphorescent materials Solar Cells Power output

per unit costSilicon, Gallium Arsenide, Cadmium Telluride, Cadmium Indium Gallium Selenide, Dye-Sensitized, Organic, Perovskite

Energy storage

Batteries Energy stored per unit volume, mass or cost

Lead acid, Nickel Cadmium, Nickel Metal Hydride, Lithium Polymer, Lithium-ion

Capacitors Carbons, polymers, metal oxides, ruthenium oxide, ionic liquids

Flywheels Stone, steel, glass, carbon fibers, carbon nanotubesInformation Trans-formation

Organic Transistors

Mobility Polythiophenes, thiophene oligomers, polymers, hthalocyanines, heteroacenes, tetrathiafulvalenes, perylene diimides naphthalene diimides, acenes, C60

Living Organisms

Biological transformation

U.S. corn output per area

Open pollinated, double cross, single cross, biotech GMO

Materials Load Bearing Strength to weight ratio

Iron, Steel, Composites, Carbon Fibers

Magnetic Strength Steel/Alnico Alloys, Fine particles, Rare earths

Coercivity Steel/Alnico Alloys, SmCo, PtCo, MaBi, Ferrites,

In Summary, Different Classes of Materials were found for Many Technologies

New Processes are Often Key Part of Creating New MaterialsNew materials usually involve new

processes◦LEDs, OLEDs, lasers◦Batteries, capacitors, flywheels◦Solar cells, superconductors

New processes are often needed to “create” the new materials

But all of these improvements are being done in laboratories

Incremental Improvements to these processes are also importantLearning curve emphasizes small changes to

the processes, which do play a role in achieving improvements

But small changes to the processes can’t explain exponential improvements in performance

Without new materials and most importantly new classes of materials, rapid rates of improvement would not be achieved

For these and other TechnologiesAt what rate is a technology being improved along

the relevant dimensions of performance or cost?When might these improvements lead to a superior

value proposition for ◦some set of users?◦most users?

Are improvements needed along other dimensions? What are the potential/limits for improvements: can

new materials that better exploit a specific physical phenomena still be found?

Are there complementary technologies that are needed for these improvements?

Must Also be Concerned with Abundance, Since Impacts Cost





Geometric Scaling (1)Definition

◦refers to relationship between geometry of technology, the scale of it, and the physical laws that govern it

◦“scale effects are permanently embedded in the geometry and the physical nature of the world in which we live” (Lipsey et al, 2005)

Studied by some engineers (and biologists), but only within their discipline◦chemical engineers: chemical plants (many references)◦mechanical engineers: engines, tankers, aircraft (fewer) ◦electrical engineers: ICs, magnetic, optical storage (many)

But very few analyses◦For engineering in general◦By management professors ◦By economists

Geometric Scaling (2)For technologies that benefit from smaller scale, the

benefits can be particularly large, since◦costs of material, equipment, factory, transportation typically

fall over long term as size is reduced◦performance of only some technologies benefit from small size◦ smaller transistors or magnetic regions can increase speed,

functionality; reduce power consumption, size of final productFor technologies that benefit from larger scale

◦output is roughly proportional to one dimension (e.g., length cubed or volume) more than is the costs (e.g., length squared or area) thus causing output to rise faster than do costs, as the scale of technology is increased

◦Also true with biology examples (think of thin vs. heavy people)

What do the dimensions of these creatureshave to do with scaling?

Enough biology (Bonner, J. 2006, Why Size Matters: From Bacteria to Blue Whales, Princeton University Press. Schmidt-Nielsen K 1984. Scaling: Why is Animal Size so Important?)

Let’s Move to technologies and ones that benefit from reductions in scale

these technologies often have very rapid rates of improvement

Moore’s LawWhy is more transistors

better?How does it impact on

performance and cost?What enables increases

in the number of transistors per chip?

http://en.wikipedia.org/wiki/Image:Diopsis.jpg

Smaller Feature Sizes Leads to More Transistors on Microprocessors

Source: http://www.nature.com/nature/journal/v479/n7373/fig_tab/nature10676_F3.htmlMultigate transistors as the future of classical metal–oxide–semiconductor field-effect transistorsIsabelle Ferain, Cynthia A. Colinge and Jean-Pierre Colinge Nature 479, 310–316 (17 November 2011)

Reducing the features (i.e., scale) on transistors leads to improvements in performance and cost

Metal OxideSemiconductor(MOS) Transistor:gate length (L) depends on feature size

Bipolar Transistor:Gate length depends on junction depth

L: gate length/junction depth

Junction depth

Gate Oxide Thickness

Emitter, Base, Collector

http://en.wikipedia.org/wiki/Image:Npn_BJT_cross_section.PNG

http://en.wikipedia.org/wiki/Image:Lateral_mosfet.svg

http://ieeexplore.ieee.org/ieee_pilot/articles/96jproc11/jproc-MSanvido-2004319/article.html

Feature Sizes are Also Becoming Smaller in MemoryAnd thus Memory gets cheaper

”, ISSCC, 2010, updated from International Solid State Circuits Conference, Technology Trends, 2016. http://www.future-fab.com/documents.asp?d_ID=4926

And in Camera Chips

Benefits from Reductions in Scale (1)Costs of most products fall as size is reduced,

since for most technologies, ◦costs of material, equipment, factory, transportation

typically fall over long term as size is reduced However, performance of only some technologies

increases as size is reduced ◦placing more transistors or magnetic or optical storage

regions in a certain area can increase speed and functionality and reduce power consumption and size of final product

◦combination of both increased performance and reduced costs has led to exponential improvements in many electronic components

Benefits from Reductions in Scale (2) Smaller gate lengths and thinner layers also

enable faster speeds and/or smaller voltages (i.e., power consumption/per transistor)

Faster speeds from smaller distances electrons must travel

Lower power consumption if voltages are reduced◦10 volts in 1980?◦1.8 to 2.5 volts in 1997◦0.5 to 0.6 volts in 2012 (estimated)

Source: ITRS (International Technology Roadmap for Semiconductors)

But this wasn’t simple….Reducing the scale of features on a

transistor required better processes ◦and new equipment for these processes

Often this equipment was developed in laboratories and often the laboratories of suppliers (and other industries)◦Photolithography depends on better lasers

While some might call this learning…….. It is a special form of learning that goes beyond tinkering with existing processes

Disruptive Innovations Often Involve Reductions in Scale

Many of Christensen’s examples also involve reductions in scale and thus rapid rates of improvement

But Christensen doesn’t emphasize rates of improvement and why they are rapid…….

Note: the media defines disruptive innovations as innovations that displace the dominant technology

Christensen’s theory of disruptive innovation ignores rapid improvements and the source of them

It also implies that performance improvements automatically emerge once a low-end innovation has been found

Christensen’s interpretation1) Low-end innovations emerge and are

used by a new set of customers; 2) Existing firms ignore them because they

don’t meet needs of their customers; 3) Increases in demand lead to

improvements in them; 4) Eventually low-end innovation displaces

dominant technology and thus incumbents fail in both new and established market

My Questions1) How do firms increase capacity of fixed

diameter disk drive?2) What drove and in particular which

markets for disk drives drove these improvements?

3) Are these rapid (or slow) improvements in capacity?4) How many other products experience such rapid improvements?

HDD: HardDisk Drives

Reductions in Scale Drive Improvements in CapacityAreal Recording Densityof Hard Disks

Similar Arguments can be made for Other Technologies

Rapid improvements occurred in most of Christensen’s disruptive technologies◦Computers (discussed later tonight)◦Walkman, VCR and other magnetic tape storage

devices◦Other electronic products

Mini-mills didn’t experience rapid improvement, but they didn’t diffuse (contrary to Christensen’s book)

Returning to Disk Drives: The Reductions in Scale Led to Falling Price per Bit

Source: Yeoungchin Yoon, Nano-Tribology of Discrete Track Recording Media, Unpublished PhD Dissertation, University of California, San Diego

But the creation of new materials also help………

https://www1.hgst.com/hdd/technolo/overview/chart11.html

https://www1.hgst.com/hdd/hddpdf/tech/chart11.pdf

Other Technologies that Benefit from Reductions in Scale (1)

MEMS (micro-electronic mechanical systems) for many applications◦Gyroscopes, resonators ◦micro-mirrors, photonics◦ ink jet nozzles for printers, micro-gas analyzers

Bio-electronic ICs (MEMS with micro-fluidic channels) for many applications◦Point-of-care diagnostics ◦Drug delivery, chips embedded in clothing,

body, DNA sequencingAll of these technologies experience rapid

improvements

http://www.memx.com/images/mems-thermal-actuator-pic.gif

Other Technologies that Benefit from Reductions in Scale (2)

Nano-technology for many applications ◦E.g., membranes, nano-particles, nano-fibers,

graphene, carbon nanotubes: e.g., smaller size leads to higher surface area-to volume ratios

◦Also other phenomena that benefit from smaller scale (Richard Feynman first noted these things in the 1950s: There is a lot of room at the bottom)

These technologies benefit from reductions in scale because certain phenomena occur at small scale

These applications are covered in supplementary slides on the IVLE (and on slideshare account)


Performance Occur?◦Creating materials that better exploit……◦Geometrical scaling

Reductions in scale Increases in scale

◦ larger production equipment: more benefits for continuous flow, furnaces/smelters, displays/solar panels than with discrete parts (e.g., automobiles)

◦Engines and transportation equipment: large benefits◦Some technologies directly experience

improvements through these two mechanisms…

Scaling in Production EquipmentWe all know about economies of scale

◦ But some products benefit from economies of scale more than do others

◦ Why? Some products benefit from increases in scale of production equipment more than do others

Largest benefits for ◦ chemicals, other continuous flow equipment◦ furnaces and smelters for materials

Smaller benefits for discrete parts equipment and their assembly

But also large benefits for ◦ Semiconductor wafers, displays, solar cells, graphene,

carbon nanotubes, and their manufacturing equipment,

Production of Liquids or Gasesin a Continuous Flow Factory

Many products are liquids or gases or are in liquid or gaseous state during production

Processes such as mixing, separating, heating, cooling, filtering, settling, extracting, distilling, drying are done in pipes and reaction vessels

Pipes◦Cost is function of surface area (or radius)◦Output is function of volume (or radius squared)

Reaction vessels ◦Cost is function of surface area (or radius squared)◦Output is function of volume (radius cubed)

Results of ScalingEmpirical analyses have found that equipment costs

only rise about 2/3 for each doubling of equipment capacity

Large continuous flow manufacturing plants have been constructed

For example, ◦Ethylene was produced in plants with less than 10,000 tons

of capacity in 1942◦By 1968, it was being produced in factories with a capacity

of 500,000 tons per year◦Capital costs per unit dropped more than 90% during these

years

Barriers to Increases in ScaleScaling only works if thickness of pipes and

reaction vessels do not have to be increased◦this requires better materials◦Without these better materials, benefits from scaling

would not occurWeight increases as the cube of a dimension while

strength only increases as the square of a dimension (remember the elephant)

Thus, limits to size of continuous flow plants begin to emerge

Similar arguments apply to many of the other examples described this semester

OutlineValue Proposition and economic feasibilityExisting theories of technological changeWhat Drives Improvements?

◦Creating materials that better exploit…..◦Geometrical scaling




improvements through these two mechanisms….

Furnaces and SmeltersUsed to process metals such as steel, copper, and

aluminumThis processing requires large amounts of fuel and

oxygenBenefits to scaling; similar to but perhaps smaller

than continuous flow production◦Cost of constructing furnace and heat loss from furnace or

smelter is function of area ◦Output is function of volume

For example, ◦Steel factories had a capacity of a single ton per day in 1700

and 10,000 tons per day by 1990◦Cost of crude steel dropped between 80 and 90 percent from

the early 1860s to the mid-1890s (following emergence of Bessemer process)

From small scale (2000 years ago) to big scale (20th century)

http://en.wikipedia.org/wiki/File:Tiangong_Kaiwu_Tripod_Casting.jpg

http://upload.wikimedia.org/wikipedia/commons/f/f0/TVA_phosphate_smelting_furnace.jpg

Example of Even Bigger Furnaces: Modern Steel Mill

http://en.wikipedia.org/wiki/File:Letecky2.jpg

http://en.wikipedia.org/wiki/File:SteelMill_interior.jpg

Increasing Scale of Blast Furnaces: Output Rose with Volume while Capital Costs and Heat Loss Rose with Surface Area

Vaclav Smil, Creating the Twentieth Century: Technical Innovations of 1867-1914 and Their Lasting Impact

Complementary Technologies Often are Needed to Benefit from “Scaling”Size of a furnace or smelter is limited by

need to deliver smooth flow of air to all of molten metal

Hand- and animal-driven bellows could only deliver a limited flow of air

Water-driven bellows and steam-driven ones allowed air to be injected with more force so that larger furnaces could be built

Large steam engines further increased the potential scale of furnaces/smelters

Bellows For Fireplace: Much Bigger Ones are Needed for Blast Furnaces

http://upload.wikimedia.org/wikipedia/commons/8/83/Bellows_(PSF).svg

Increasing Scale of Aluminum “Cells:” Output Rose with Volume while Capital Costs and Heat Loss Rose with Surface Area

Inflation adjusted prices/costs also fell: prices fell from $721/ton in 1900 to $65.6/ton in 2000 ($1640 in 2000 prices)

http://electrochem.cwru.edu/encycl/fig/a01/a01-f05b.jpg


Electrolytic cell for 300 kA prebaked carbon anode technology for aluminum production

Cross section of a modern prebake anode aluminum reduction cell

http://electrochem.cwru.edu/ed/dict.htm


For Your ProjectsSome groups will analyze new materials that

probably benefit from increases in scaleTry to use previous slides to estimate benefits

from increasing scale of production equipmentWhen papers say technology benefits from

increases in temperature or pressure, higher temperature and pressure probably require larger scale

Academic papers might not tell you there are benefits from increases in scale◦They will focus on design tradeoffs◦You must read between the lines







Discrete Parts ProductionMuch lower benefits from increases in scale of

discrete parts production equipment than from equipment for ◦liquids, gases (continuous flow production), ◦metals (furnaces and smelters)

Larger machines load, cut, bore, assemble parts faster than smaller machines◦But problems with loading/unloading

Benefits also depend on type of product. More benefits for automobiles than for apparel, shoes, or electronics

Don’t expect your phone to get cheaper from increases in scale (more later)

Impact of Scaling in Production Equipment on Price of Autos

In 1909: standard 4-seat Model T cost $850 (equivalent to $20,091 in 2011)

The price dropped ◦ to $440 in 1915 (equivalent to $9,237 in 2011)◦ $290 in 1920s (equivalent to $3,191 in 2011 or similar to

cheapest Tata-Nano) mostly because of substituting equipment for labor

Since then the scale of automobile factories has been reduced

Today few auto factories produce more than 100,000 autos/year

Diminishing returns to scale emerged many years ago

http://en.wikipedia.org/wiki/Image:Late_model_Ford_Model_T.jpg




◦ larger production equipment: more benefits for continuous flow, furnaces/smelters, wafers/displays/solar panels than with discrete parts (e.g., automobiles)



Increases in Scale of IC Wafers, LCD Substrates, Solar Substrates (1)Equipment costs per area of output fall as

size of equipment is increased, similar to chemical plants◦Cost is function of surface area (or radius squared)◦Output is function of volume (radius cubed)◦Thus, costs increase by 2/3 for each doubling

For IC Wafers, LCD and Solar Substrates◦Processing time per area (inverse of output) fall as

volume of gas, liquid, and reaction chambers become larger; costs rise as function of equipment’s surface area

◦Transfer times per area may also fall with larger substrates

◦Larger wafers/substrates have smaller edge effects

Source: http://mrsec.wisc.edu/Edetc/SlideShow/slides/contents/computer.html

http://www.electroiq.com/articles/sst/print/volume-50/issue-2/features/cover-article/scaling-and-complexity-drive-lcd-yield-strategies.html

Impact of Larger LCD substrates on Costs

Other Flat Panel TechnologiesNot just semiconductor wafers, LCDs, and

solar cellsContinuous casting of steelRoll-to roll printing for newspapers,

magazines, OLEDs, and flexible substrates◦Organic solar cells◦RFID tags

Some of these technologies will be discussed in future sessions




◦ larger production equipment◦Engines and transportation equipment: large benefits

◦Some technologies directly experience improvements through these two mechanisms….

Example of Benefits of Larger Scale: Engines

Diameter of cylinder (D)

Cost of cylinderor piston is function of cylinder’s surface area (πDH)

Output of engineis function ofCylinder/piston’svolume (πD2H/4)

Result: output risesfaster than costs asdiameter is increased

Heightofcylinder(H)

http://en.wikipedia.org/wiki/File:Cylinder_2_(PSF).png

1

10

100

1000

10000

1 10 100 1000 10000Output (Scale)

Pric

e pe

r Out

put

Price Per Output (Horsepower)

Marine EngineLargest is 90,000 HP

Source: Honda’s 2010 Price List

From ¾ horsepower in 1885 (Benz) to world’s largest internal combustion engine (90,000 HP)

Produced by Wartsila-Sulzerand used in the Emma Maersk (a ship)

http://gcaptain.com/maritime/blog/?attachment_id=505

http://upload.wikimedia.org/wikipedia/commons/7/71/1885Benz.jpg

Increasing power density of engines is from new materials and increasing the scale of engines

From 1807 tons in 1878 To 500,000 tons in 2009

Oil Tankers

http://en.wikipedia.org/wiki/File:Fallsofclydehonolulu.jpg

http://upload.wikimedia.org/wikipedia/commons/8/82/Hellespont_Alhambra-223713_v2.jpg

Holds18,000 containers (11% bigger than previous one) and has20% less fuel consumption per ton than previous one (cost of $190 million), http://edition.cnn.com/2013/06/26/business/maersk-triple-e-biggest-ship/index.html?hpt=ibu_c2

Cargo Vessels Transporting Containers

From 10 HP (horse power) in 1817 To 1,300,000 HP today (1000 MW)

Steam engine

Their modern day equivalent: steam turbine

http://en.wikipedia.org/wiki/File:Stott_Park_Bobbin_Mill_Steam_Engine.jpg

http://en.wikipedia.org/wiki/File:Dampfturbine_Montage01.jpg

From Kilowatts (125 HP engine) to Giga-Watts

Electricity Generating Plants

Edison’s Pearl Street Station More Recent Plantin NY City (1880)

http://en.wikipedia.org/wiki/File:PearlStreetStation.jpg

http://en.wikipedia.org/wiki/File:Susquehanna_steam_electric_station.jpg

From DC-1 in 1931(12 passengers, 180 mph)

To A-380 in 2005(900* passengers, 560 mph)

*economy only mode

http://en.wikipedia.org/wiki/File:Qantas_a380_vh-oqa_takeoff_heathrow_arp.jpg

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tive

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Relative Price Per Output Falls as Scale Increases

Steam Engine (in HP) Maximum scale: 1.3 M HP

Marine EngineLargest is 90,000 HP

Chemical Plant: 1000s of tons of ethyleneper year; much smaller plants built

Commercial aircraftSmallest one had

12 passengers

Oil Tanker:1000s of tonsSmallest was

1807 tons

Output (Scale)

LCD Mfg Equip: Largest panel size is 16 square meters

Aluminum(1000s of amps)

Electric PowerPlants (in MW); much smaller ones built

For your ProjectsDoes your technology benefit from increases or

decreases in scale? If so, what kind? Smaller or larger?◦Can we analyze this scaling and the potential cost reductions

from scaling◦Can we estimate when might these benefits from geometric

scaling lead to a superior value proposition for some set of users? most users?

Also what are the potential limits from geometric scaling? Or are there complementary technologies that are needed to benefit from geometric scaling

If the technology does not benefit from increases or decreases in scale, maybe a “key” component does


◦Creating materials that better exploit physical phenomena

◦Geometrical scaling◦Some technologies directly experience


In GeneralSome components have a large impact on

cost and performance of a systemComponents that benefit from scaling can

◦have a large impact on performance and cost of systems, even before system is implemented

◦lead to changes in relative importance of cost and performance and between various dimensions of performance

◦lead to discontinuities in systemsImprovements in components may enable

new forms of systems to emerge

In General (2)Improvements in engines impacted on

◦Locomotives, ships◦Automobiles, aircraft

Improvements in ICs impacted on◦computers, servers, routers, telecommunication

systems and the Internet◦radios, televisions, recording devices, and other

consumer electronics◦mobile phones and other handheld devices◦controls for many mechanical products

Improvements in ICs led to many discontinuities in systems◦Partly because they enable the improvements and

because they represent most of the costs

ComputersNote the similar levels of improvements between 1960 and 2000 (about 7 orders of magnitude)

Source: Wikipedia

As one computer designer argued, by the late 1940s computer designers had recognized that “architectural tricks could not lower the cost of a basic computer; low cost computing had to wait for low cost logic” (Smith, 1988)

Improvements in Computers Primarily Driven by improvements in ICs

Quote by one computer scientist◦by the 1940s computer designers had recognized that

“architectural tricks could not lower the cost of a basic computer; low cost computing had to wait for low cost logic” and

◦“much of computer architecture is unchanged since the late 1940s”

Similar levels of improvements◦9 orders of magnitude for ICs in last 50 years◦9 orders of magnitude for computers in last 50 years

But changes in the way these ICs are organized and their algorithms were also needed

Smith, 1988. A Historical Overview of Computer Architecture. IEEE Annals of the History of Computing 10(4), 277-303

Better ICs Made New Forms of Computers Economically Feasible

Mainframe computers – early 1950sMini-computers – mid-1960sPersonal computers – mid-1970sWorkstations – early 1980sPortable computers

◦Laptop - late 1980s◦Personal digital assistant – mid-1990s◦Notebook – early 2000s◦Smart phones – mid-2000s◦Tablet computer – about 2010

What is next?

New Types of Computers Required cheaper and better

◦electronic components For mainframe computers it was better vacuum tubes For subsequent discontinuities, it was better ICs

◦Magnetic storage such as hard disks◦Displays (at least recent computers)

All of these computers were based on architectures (and concepts) that have been know since 1940s◦Thus bottleneck has been electronic components,◦Better components have also enabled use of more

sophisticated software

Similar Arguments can be Made for Other Electronic Products/SystemsSimilar arguments be made for

◦Mobile phones and other portable devices◦Servers, routers, and much of the Internet◦Video game consoles (and other simulators)◦Set-top boxes and much of cable TV systems◦Automated algorithmic trading of stocks by hedge

funds, and online universities◦To some extent, also better control over

machinery, production systems, mechanical products such as autos

Laptops MP3 PlayersCalculators Video Set-top boxes E-Book Readers Digital Games Web Browsers Digital TV Watches Mobile Digital Cameras Smart Phones PCs Phones PDAs Tablet Computers

Timing is Critical, Different Products Require Different Levels of Performance and Cost in ICs

Disruptive InnovationsMany of these new computers can be

considered disruptive innovationsThey entered from low-end, gradually became

better, and displaced higher end productsBut Christensen’s theory doesn’t address why

these low-end innovations emerged when they did - Why did they emerge and why did they become better? ◦Improvements in ICs were the sources of

improvements◦Demand didn’t drive the improvements

HDD: HardDisk Drives

Earlier: Higher Platter Densities Enable Smaller Disk DrivesAreal Recording Densityof Hard Disks

This For Computers: Better ICs Make New Forms of Low-End Computers Economically Feasible

Better ICs also Enabled New forms of Hi-End Computers: Magnetic Resonance Imaging (MRI),

Computer Tomography (CT)Quote by Trajtenberg (1990)

◦“However, it was not until the advent of microelectronics and powerful mini-computers in the early seventies, the early seventies, coupled with significant advances in electro-optics and nuclear physics, that the revolution in imaging technologies started in earnest. Computed Tomography scanners came to epitomize this revolution and set the stage for subsequent innovations, such as………..and the wonder of the eighties, Magnetic Resonance Imaging”

Quotes from Kalendar, 2006◦ “Computed tomography became feasible with the development of

modern computer technology in the 1960s”

Better ICs also enabled New Software Languages, Paradigms, and Tools to Become Feasible

http://xlr.sourceforge.net/concept/moore.html

http://xlr.sourceforge.net/concept/moore.html

Better ICs also enabled New Software Languages, Paradigms, and Tools (2)

Moore’s Law ◦reduces importance of software efficiency and thus

programming in assembly language◦How many people program in Assembly Language? ◦fast speeds of microprocessors reduce importance of

using too much code or reusing code◦Can reuse large blocks of code

Challenges for software development have changed◦Programming keeps moving to higher level languages

Another Look at How Better ICs Enabled New Forms of Software: Intel’s View

Moore’s Law has enabled new software tools:◦ • simple line-mode text editor (e.g., ed)◦• multi-line character-mode text editor (e.g., vi)◦• extensible character-mode editor (e.g., Gnu

Emacs)◦• language-aware GUI code editor (e.g., TextMate

and Sublime Text)◦• full IDE (e.g., Visual Studio, Xcode, Eclipse et al)

What’s Next

http://blogs.intel.com/evangelists/2015/04/18/moores-law-and-its-direct-impact-on-software/A Lockstep Evolution in Software Tools

For a Given Device (Server and Desktop shown), Moore’s Law Also Made Larger Operating Systems Possible

Macccaba B 2014. Why Software doesn’t follow Moore’s Law, Forbes, May 19.

Improvements in ICs also Enabled Internet and Mobile PhonesAlong with improvements in glass fibers,

lasers (Session 6), and photo-sensors◦improvements in Internet speed, bandwidth

and cost have occurredICs had a larger impact on mobile phones

and mobile phone systems than on wireline systems

As long as Moore’s Law continues, improvements in wireline transmission speeds will also continue

Increases in Speed Enable Increases in Web Page SizeAnd Number of Objects (pictures, videos, flash files)

Higher Speeds Also Propel Cloud

http://www.cisco.com/c/en/us/solutions/collateral/service-provider/global-cloud-index-gci/Cloud_Index_White_Paper.html

Everything is Moving to CloudIncluding Enterprise Software and Personal Storage

http://www.cisco.com/c/en/us/solutions/collateral/service-provider/global-cloud-index-gci/Cloud_Index_White_Paper.html

Increases in Speed, Web Size, and Number of Object have Enabled new products and servicesNew forms of software, e-commerce, Consumer

Internet, financial servicesMost members of billion dollar startup club

provide these types of servicesMany of these services are also driven by

improvements in mobile phones (see below) and networks

These services are discussed in more detail in Session 3

Improvements in Internet Speed, Bandwidth, Cost Continue to Occur

Because improvements in building blocks of Internet continue to occur

Lasers and photo-sensors enable further wave length division multiplexing (WDM)◦There is no limit to the number of wavelengths

that can be transmitted down fiber optic cableImprovements in integrated circuits and

photonics enable better routers, servers, and switches◦Photonics integrates light and ICs

http://www.slideshare.net/Funk98/telecommunication-systems-how-is-technology-change-creating-new-opportunities-in-them

Wireless Systems have also Experienced Rapid Improvements

This source and the

International Solid State

Circuits Conference

attribute the improvements in

speeds to

improvements in ICs

Again, It’s Mostly About Better ICs

Gonzalez M, 2010. Embedded Multicore Processing for Mobile Communication Systems, ruhr-uni-bochum.de/integriertesysteme/emuco/files/hipeac_trends_future.pdf

Newer Systems and Faster Speeds Require Higher Frequencies (fT) of High Mobility Electronic Transistor Devices

Newer Systems and Faster Speeds Require Higher Frequencies (fMAX) of High Mobility Electronic Transistor Devices

We are also Interested in Short Range Wireless Technologies (Improvements Driven by ICs)

Source: AStar, Kausik MandalNFC: Near Field Communication

Range

DataRate Previous slides

focused on this range

Another Way to Look at Short-Range Wireless Technologies(Size of cell Radius)

WiFi As of 30 July, 2015

◦One wi-fi hot-spot for every 7 people in UK, 10 people in South Korea

◦One for every 70 in the world By late 2018

◦One for every 20 in the world, every 5 in the UK, every 3 in South Korea, and every 408 in Africa

What does this mean for new forms of services◦Everything will be connected◦Not just new forms of electronic systems, new

forms of solutions and services will emergehttp://www.ipass.com/wifi-growth-map/

https://www.strategyanalytics.com/strategy-analytics/news/strategy-analytics-press-releases/strategy-analytics-press-release/2016/03/09/strategy-analytics-wi-fi-report-rapid-growth-of-802.11ad-wigig-expected-in-2016#.V1aEwPl96Uk

2016

http://www.wi-fi360.com/latest-cisco-vni-quantifies-mobiles-growth-and-wi-fis-role-as-competitor-and-enabler/

MRI and CT Scanners Laptops MP3 PlayersCalculators Video Set-top boxes E-Book ReadersDigital Games Web Browsers Digital TV Watches Mobile Digital Cameras Smart PhonesPCs Phones PDAs Tablet Computers

Let’s Look at New Forms of Electronic Products in More Detail: Moore’s Law Makes New Products Economically Feasible

For more details, see Funk J, Technology Change and the Rise of New Industries, Stanford University Press 2013slidehttp://www.slideshare.net/Funk98/how-is-technology-change-creating-new-opportunities-in-integrated-circuits-ics-and-electronic-systems

What’s next?

Type of Product

Final Assembly Standard Components1

Number of Data Points

Average (%)

Number of Data Points

Lower Estimate for Average2 (%)

Smart Phones

28 4.2% 26, 28 76%, 79%

Tablet Computers

33 3.1% 33, 33 81%, 84%

eBook Readers

6 4.9% 6, 9 88%, 88%

Game Consoles

2 2.4% 2, 2 64%, 70%

MP3 Players 2 3.4% 2, 9 74%, 75%Large Screen Televisions

2 2.4% 2, 2 82%, 84%

Internet TVs 2 5.7% 2, 2 57%, 61%Google Glass 1 2.7% 1, 1 62%, 64%

Standard Components Determine Cost and Performance of Many Electronic Products

1 Values as a percent of total and material costs; 2 Excludes mechanical components, printed circuit boards, and passive components

Type of Product

# of Data Point

Memory

Micro-Proc-essor

Display

Camera

Connectivity, Sensors

Bat-tery

Power Mgmt

Phones 23 15% 22% 22% 8.2% 7.9% 2.3% 3.8%Tablets 33 17% 6.6% 38% 2.9% 6.3% 7.3% 2.5%eBook Readers

9 10% 8.1% 42% .30% 8.3% 8.3% Not available

Game Console

2 38% 39% none none Not available

none 5.8%

MP3 Players

9 53% 9% 6% none Not available

4% 3.5%

TVs 2 7% 4.0% 76% none Not avail. none 3.0%Internet TVs

2 16% 31% none none 10.5% none 3.5%

Google Glass

1 17% 18% 3.8% 7.2% 14% 1.5% 4.5%

Contribution of Specific “Standard Components” to Costs of Selected Electronic Products

Summary of Previous SlideProcessors and Memory (including DRAM, SRAM,

flash, hard disks, CDs) represent high % of costs◦ Game consoles (77%), MP3 players (53%)◦ Internet TVs (47%), Smart phones (37%)

For smart phones, multiple processors◦ Internal processing of music, video, apps◦ Processing of cellular network signals (and WiFi)

Displays represent largest percentage in◦ Large screen televisions (76%)◦ Tablet computers (38%)◦ eBook Readers (42%)

All these components experience rapid improvements◦ Processors, memory (Moore’s Law, 40% per year), camera:

30 to 50% per year, displays: 12% per year

InterpretationA small number of standard components play

important role in electronic products and improvements in them◦Enable improvements◦Determine new types of functions

This is why many people emphasize Moore’s Law◦Because it is really changing our world!◦Microprocessors, memory, camera, WiFi, and

many sensors (such as MEMS) experience rapid improvements through reductions in scale

Let’s look at the iPhone in more detail

Measure iPhone iPhone 3G iPhone 4 iPhone 5 iPhone 6Operating System

1.0 2.0 4.0 6.0 8.0

Flash Memory

4, 8, 16GB 8 or 16GB 8, 16, 64GB 16, 32, 64GB 16, 64, or 128GB

DRAM 128MB 128MB 512MB 1GB 1GBApplicationProcessor

620MHz Samsung 32-bit RISC

1 GHz dual-core Apple A5

1.3 GHz dual-core Apple A6

1.4 GHz dual-core Apple A8

Graphics Processor

PowerVR MBX Lite 38 (103 MHz)

PowerVR SGX535 (200 MHz)

PowerVR SGX543MP3 (tri-core, 266 MHz)

PowerVR GX6450 (quad-core)

Cellular Processor

GSM/GPRS/EDGE

Previous plus UMTS/HSDPA 3.6Mbps

Previous plusHSUPA 5.76Mbps

Previous plus LTE, HSPA+, DC-HSDPA, 4.4Mbps

Previous plus LTE-Advanced, 14.4Mbps

Display resolution

163 ppi (pixels per inch) 326 ppi 401 ppi

Camera resolutionVideo speed

2 MP (mega-pixels) 5 MP30 fps, 480p

8 MP30 fps at 1080p

8 MP60 fps at 1080p

WiFi 802.11 b/g 802.11 b/g/n

802.11 a/b/g/n 802.11 a/b/g/n/ac

Other Bluetooth 2.0 GPS, compass, Bluetooth 2.1, gyroscope

GPS, compass, Blue-tooth 4.0, gyroscope, voice recognition

Previous plus finger-print scanner, near-field communication

Evolution of iPhone in Terms of Measures of Performance

Fps: frames per second480p: progressive scan of 480 vertical lines

Summary of Previous SlideMore memory enables more data to be saved

◦ Songs , pictures◦ Videos , games , apps

Faster processors means◦ More sophisticated apps, games and cellular networks, the

latter enables higher speeds◦ Higher resolution audio, displays, video, cameras

Faster and newer WiFi Bluetooth chips◦ Mean higher data speeds

Better displays means higher resolution video, pictures

New functions come from new components◦ Compasses , gyroscopes , voice recognition◦ Finger-print scanners , near-field communication

As an Aside, What About Development Costs?

If standard components contribute more to improvements than do changes in phone design, ◦ development costs should be higher for components than

phonesFor phones, development costs estimated at $150

million for first iPhone (Gizlogy, 2015) ◦ more recent smart phones are 1/10 this amount or $15 million

(Yota, 2015), possibly through the use of open source software For components, cost of developing

◦ smart phone processors estimated at $1Billion (Vance, 2010) ◦ simpler chips range from $20 million to $100 million

(McKinsey, 2013)Much higher development costs for ICs consistent

with conclusion that improvements in smart phones primarily come from improvements in ICs

For the first iPhone What Levels of Performance and cost

were needed in each Component?◦Memory◦Microprocessors◦displays

The 4GB iPhone could Store760 songs, 4000 pictures (4 megapixel

JPEG), four hours of video, or 100 apps/games, or some combination of them

Equal usage◦190 songs◦1000 pictures ◦one hour of video ◦25 apps/games

Was 4GB of flash memory necessary, or would less have been sufficient?

The Average User Downloaded 58 Apps or a Significant Fraction of Memory Available in 4GB Phone

Sensitivity Analysis of Flash Memory Cost

Cost of iPhone 5 varied from $207 to $238 depending on flash memory capacity◦ 16GB, 32GB, or 64GB

For iPhone 4s, costs range from $196 to $254 for same range in flash memory

For iPhone 3GS, 16GB of flash memory are $24 thus suggesting costs for same change in capacity would range from $179 to $251

In percentage terms, same changes in flash memory capacity led to increase of 40% in iPhone 3GS and increase of only 15% in iPhone 5

Other Necessary ComponentsNeeded sufficient processor to have 3G

network capability◦It also needed to be inexpensive

What about camera, WiFi, gyroscope, other sensors?

The Future isn’t Over!Session 4 discusses more examples of new systems

enabled by improvements in ICsSession 5 discusses IoT – new types of mechanical

products are being enabled by improvements in ICs, sensors, transceivers, and energy harvesters

Session 6 discusses health care – new types of health care products are being enabled by improvements in bio-electronic ICs

Session 8 discusses human-computer interfaces and wearable computing

Other sessions focus on different components and different systems

Some of these Technologies Will be Low-End Disruptive TechnologiesNew computers are often low-end disruptive

innovations that are enabled by improvements in microprocessors, memory, and other electronic components◦Mini-, personal, and laptop computers◦Personal digital assistants, tablet computers

Similar things will happen with ◦Phones◦Internet of things◦Health care◦Wearable computing

Summary (1)Technologies that experience rapid improvements

in performance and cost are more likely to create new opportunities than are other technologies

These two “mechanisms” provide a better understanding of how and why improvements occurred in some technologies more than in others◦ Creating materials that better exploit physical phenomena◦ Geometrical scaling

We can use these mechanisms to think about when a new technology might offer a superior value proposition

Summary (2)Think about how these mechanisms apply to a

specific technology for group project◦ Creating materials that better exploit physical phenomena◦ Geometrical scaling (reductions and/or increases in scale)◦ Both directly or indirectly (Impact of components on higher

level systems)For the technology, think about

◦ current advantages and disadvantages when compared to old technology

◦ sources and rates of improvement in new technology◦ might these rates accelerate or de-accelerate?◦ What kinds of new systems, i.e., entrepreneurial

opportunities will these changes create?

Summary (3)Be specific about the components in your

technology and their ◦rates of improvement◦do we expect these rates to increase or decrease?◦Do these components benefit from some kind of

scaling, such as reductions in scale?For many of your projects, the rates of

improvements in the components will determine the rates of improvements for your system

What enables improvements in cost and performance to occur?

Business