The Intel Economy?(interview with Gordon Moore)(Interview)

Silicon Valley pioneer Gordon Moore is the cofounder of Intel, the world's largest semiconductor manufacturer. In 1965 he predicted that the speed of computer chips would double, or the prices would fall by half, every 18 months for the next decade. "Moore's Law" became a prime driver of progress in the Information Age, and has startled Moore himself by holding true right up to the present day. Now, some economists have come to believe that America's "miracle economy" of the late 1990s is driven largely by the extraordinary productivity of the semiconductor industry, even by Intel itself. Moore spoke with NEWSWEEK's Tony Emerson. Excerpts:

NEWSWEEK: Does the idea that we are in an Intel-driven economy make sense to you?

MOORE: It's hard to think of it that way the last few months. [Laughs.] [Intel earnings are falling amid signs of a downturn.] Maybe from the mid-'80s at least into the late '90s, the real impact of spreading PCs around, opening up the Internet, increasing the use of information technology was moving rapidly.

Are we seeing Moore's Law at work?

You know, things get faster and use less power, increase reliability and, most importantly, they get cheaper. There's no trade-off. It's kind of a violation of Murphy's Law [that what can go wrong, will]. We've been taking advantage of that now for 40 years and it's beginning to have an increasingly strong impact.

What are the risks to the United States of relying so heavily on one industry?

Well, you know, eventually, the technology runs out of gas. You can only push it so far and then you run into problems. There is a minimum size that you can't go below. And you know, that may be a decade away. I suspect the impact on the economy will continue significantly after we reach those limits, though. But will the last 40 years be repeated in the next 40 years? I think we'll reach some limits well before we get that far down the road.