By In 1965, Dr. Gordon Moore was asked to write an article describing the future of electronics for the 35th anniversary issue of Electronics magazine. At that time, integrated circuits (IC) were four years old, planar transistors were only six years old, Moore was the director of the research and development laboratories at Fairchild Semiconductor, and they were creating state-of-the-art ICs with 60 components. In this seminal article, Cramming More Components onto Integrated Circuits, (Electronics; volume 37, no. 8; April 19, 1965), Moore postulated his now-famous law: The number of transistors that can be integrated on a chip will grow exponentially by a factor of two.
But thats not really what he said, and he didnt postulate anything. What he did say was the complexity for minimum component costs of ICs had increased at a rate of log 2 per year, and over the short term (10 years), this rate could be expected to continue. He further predicted that by 1975 the number of components per integrated circuit for minimum cost will be 65,000. Moore observed the cost per component is inversely proportional to the number of componentsto a point. As components are added, a point is reached where costs per component begin to rise. That point is the minimum component cost and is determined by the state of the technology at the time. In 1965, it was 50 components per circuit.