The price of computers stays about constant, but their power increases. It is worth considering the implications of this law. It leads to an incredibly fast-paced industry in which any company that lapses in development is quickly left behind.
Allied with Moore's Law is the trend in storage capacity, which falls in price on average by about 20% per year.
In 1959 Noyce filed a patent for a planar process for coating a layer of oxide over silicon. This led to the invention of the integrated circuit (IC). Before this, each function in a computer required a separate circuit.
The oxide layer in the planar process meant that transistors could be linked without the need for wires. Integrated circuits could now be developed which were both complex and cheap to produce.
In 1968 Noyce founded Intel with Gordon MooreIntegrated circuits were used in many different devices, from calculators to missile guidance systems. Each device had its own circuits specifically designed to perform each of the various functions required. Each function was hard-wired into each circuit, that is the transistors were connected together to produce the desired behaviour. Hoff recognised that this was an uneconomical method of working. It would be far better, he reasoned, to use the planar process to produce a general-purpose circuit which could then be programmed to perform required functions. This would have a two-fold saving: instead of producing twelve different chips for a calculator, twelve circuits could be combined on one chip, and that same chip could be used in the missile guidance system, simply by changing its set of instructions. This was the microprocessor.
It was Faggin who led the actual production of the chip, developing new technology to do so. Faggin was the main force behind the successors to the 4004 chip, the 8008 and 8080. It is arguable that without Faggin, Intel could never have made the microprocessor. So why is it that Hoff alone gets most of the credit? One of the reasons is that while Hoff stayed at Intel, Faggin went on to found Zilog,
The 4004 was not an overnight success, but Intel advertised its product, as 'The computer on a chip'. These adverts called on software developers to write programs for the 4004 which would demonstrate its usability in a wide range of products. While Faggin was developing the 8008, Hoff was out trying to convince computer professionals to use the new microprocessor. He had a hard time, since most of them were raised with mainframes, and the notion of a cheap general-purpose chip did not seem useful or realistic. This is often the case with new technology.
So there was something of a 'chicken and egg' problem. The products could not exist without the microprocessor, yet Intel could not produce microprocessors without a market for them. Intel set about trying to persuade the electronics industry of the potential of the 4004 and 8008. In late 1972 enough engineers had become familiar with them, and had begun experimenting, that the use of microprocessors began to take off.
The key point in Intel's history is when IBM chose to use their 8086 chip in their PC. There is a successor range to Pentiums currently in development, with clock speeds of 1.5 GHz.
There have been allegations made against Intel (just as there were against Microsoft) that it is anti-competitive. Its success has led to a near monopoly in its market.