Course:ELEC300E/CaseStudies/IntelsVirtuousCycle

Embodied Costs of Computing and Repair
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Content / Topics
Semiconductor Business Models
Environmental Impacts
Relevant Analysis Strategies or Tools
Systems Mapping

Context: Semiconductor Business Models

How do semiconductor companies ensure that they stay profitable and grow?

Moore's Law: For a long time the semiconductor industry hinged on Moore's Law: an observation by Gordon Moore, a founder of Intel, that the number of transistors on an integrated circuit doubled around every 2 years.

Figure 1: Moore's Law as a CLD

Moore's law can be seen as a positive feedback loop (see Figure 1).

Decreasing the size of transistors, and increasing the number of transistors per chip increased the transistor speeds, the degree of parallelism that was possible, and the complexity of the hardware. This increased the performance and functionality of the chips, which in turn drove the creation and growth of new markets and applications. Profits from the growth of these markets could be invested in research and development, allowing for continued advances in semiconductor device fabrication.

Semiconductor scaling cannot continue indefinitely however, and has generally slowed in recent years.

Case: Intel's Virtuous Cycle of Growth

In 2016, Intel CEO Brian Krzanich laid out a new vision for Intel, entitled 'Intel's Virtuous Cycle of Growth', another positive feedback loop to drive growth and company profits.

Figure 2: Intel's Virtuous Cycle of Growth as a CLD

A Causal Loop Diagram illustrating the new virtuous cycle is shown in Figure 2.

The new business strategy depended on self-reinforcing growth in different business sectors. The internet of things (typically low-end consumer electronics) would drive demand for cloud computing (high-performance devices), and create massive streams of data, which could be used to train machine learning models. Increasing demand and sales of both types of device would allow Intel to invest in improving datacenter and cloud capabilities (including cloud-based machine learning) would open new markets and opportunities for the Internet of Things.

Recommended Readings and Resources

• ~5 minute blog post by the CEO of Intel, explaining the Virtuous Cycle of Growth: https://web.archive.org/web/20160901234614/https://newsroom.intel.com/editorials/brian-krzanich-our-strategy-and-the-future-of-intel/

Discussion Questions

Here are a few questions to help you begin analyzing the issues discussed in this case study. The purpose of these questions is to prompt reflection and further consideration: there are no right or wrong answers!

• Are there any feedback loops in the Systems maps shown in Figure 1 and Figure 2? What are the impacts of these loops? Do they reinforce or amplify changes or maintain stability?
• Why do you think the system in Figure 2 is called a "virtuous cycle"? Do you think this name is accurate?
• Change your focus from financial impacts to environmental sustainability. What nodes and connections might you add to the systems map to begin to model the environmental effects of the system? How does adding these nodes change how you might interpret the system and its impacts?
• Do you have any takeaways on the uses and limitations of systems mapping?