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112-439: SACEUR Rogers was troubled by NATO's inadequate conventional military forces when faced with a Warsaw Pact that dominated his on a numeric basis, and ceteris paribus , he would need to resort to the nuclear option. To improve NATO's conventional defence capability, Rogers proposed a novel idea he labelled the "Follow-on Forces Attack" (FOFA) Concept, which theorized to counter a Warsaw Pact invasion by making deep conventional attacks

224-492: A design flow that engineers use to design, verify, and analyze entire semiconductor chips. Some of the latest EDA tools use artificial intelligence (AI) to help engineers save time and improve chip performance. Integrated circuits can be broadly classified into analog , digital and mixed signal , consisting of analog and digital signaling on the same IC. Digital integrated circuits can contain billions of logic gates , flip-flops , multiplexers , and other circuits in

336-627: A fabrication facility (commonly known as a semiconductor fab ) can cost over US$ 12 billion to construct. The cost of a fabrication facility rises over time because of increased complexity of new products; this is known as Rock's law . Such a facility features: ICs can be manufactured either in-house by integrated device manufacturers (IDMs) or using the foundry model . IDMs are vertically integrated companies (like Intel and Samsung ) that design, manufacture and sell their own ICs, and may offer design and/or manufacturing (foundry) services to other companies (the latter often to fabless companies ). In

448-412: A microprocessor will have memory on the chip. (See the regular array structure at the bottom of the first image. ) Although the structures are intricate – with widths which have been shrinking for decades – the layers remain much thinner than the device widths. The layers of material are fabricated much like a photographic process, although light waves in the visible spectrum cannot be used to "expose"

560-466: A common active area, but there was no electrical isolation to separate them from each other. The monolithic integrated circuit chip was enabled by the inventions of the planar process by Jean Hoerni and p–n junction isolation by Kurt Lehovec . Hoerni's invention was built on Carl Frosch and Lincoln Derick's work on surface protection and passivation by silicon dioxide masking and predeposition, as well as Fuller, Ditzenberger's and others work on

672-542: A common substrate in a three-stage amplifier arrangement. Jacobi disclosed small and cheap hearing aids as typical industrial applications of his patent. An immediate commercial use of his patent has not been reported. Another early proponent of the concept was Geoffrey Dummer (1909–2002), a radar scientist working for the Royal Radar Establishment of the British Ministry of Defence . Dummer presented

784-460: A company gains an added benefit by expanding its size. These economies are due to the presence of some resource or competence that is not fully utilized, or to the existence of specific market positions that create a differential advantage in expanding the size of the firms. That growth economies disappear once the scale size expansion process is completed. For example, a company that owns a supermarket chain benefits from an economy of growth if, opening

896-591: A differentiated demand with respect to the quality of the product, and assistance before and after the sale. Very different organizational forms can therefore co-exist in the same sector of activity, even in the presence of economies of scale, such as, for example, flexible production on a large scale, small-scale flexible production, mass production, industrial production based on rigid technologies associated with flexible organizational systems and traditional artisan production. The considerations regarding economies of scale are therefore important, but not sufficient to explain

1008-491: A few square millimeters. The small size of these circuits allows high speed, low power dissipation, and reduced manufacturing cost compared with board-level integration. These digital ICs, typically microprocessors , DSPs , and microcontrollers , use boolean algebra to process "one" and "zero" signals . Among the most advanced integrated circuits are the microprocessors or " cores ", used in personal computers, cell-phones, etc. Several cores may be integrated together in

1120-421: A firm's costs, returns to scale describe the relationship between inputs and outputs in a long-run (all inputs variable) production function. A production function has constant returns to scale if increasing all inputs by some proportion results in output increasing by that same proportion. Returns are decreasing if, say, doubling inputs results in less than double the output, and increasing if more than double

1232-428: A large transistor count . The IC's mass production capability, reliability, and building-block approach to integrated circuit design have ensured the rapid adoption of standardized ICs in place of designs using discrete transistors. ICs are now used in virtually all electronic equipment and have revolutionized the world of electronics . Computers, mobile phones, and other home appliances are now essential parts of

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1344-408: A layer of material, as they would be too large for the features. Thus photons of higher frequencies (typically ultraviolet ) are used to create the patterns for each layer. Because each feature is so small, electron microscopes are essential tools for a process engineer who might be debugging a fabrication process. Each device is tested before packaging using automated test equipment (ATE), in

1456-427: A more efficient division of labour. The economies of division of labour derive from the increase in production speed, from the possibility of using specialized personnel and adopting more efficient techniques. An increase in the division of labour inevitably leads to changes in the quality of inputs and outputs. Many administrative and organizational activities are mostly cognitive and, therefore, largely independent of

1568-407: A new supermarket, it gets an increase in the price of the land it owns around the new supermarket. The sale of these lands to economic operators, who wish to open shops near the supermarket, allows the company in question to make a profit, making a profit on the revaluation of the value of building land. Overall costs of capital projects are known to be subject to economies of scale. A crude estimate

1680-428: A number of steps for the p–n junction isolation of transistors on a chip, MOSFETs required no such steps but could be easily isolated from each other. Its advantage for integrated circuits was pointed out by Dawon Kahng in 1961. The list of IEEE milestones includes the first integrated circuit by Kilby in 1958, Hoerni's planar process and Noyce's planar IC in 1959. The earliest experimental MOS IC to be fabricated

1792-420: A process known as wafer testing , or wafer probing. The wafer is then cut into rectangular blocks, each of which is called a die . Each good die (plural dice , dies , or die ) is then connected into a package using aluminium (or gold) bond wires which are thermosonically bonded to pads , usually found around the edge of the die. Thermosonic bonding was first introduced by A. Coucoulas which provided

1904-496: A product X is lower when a single firm instead of two separate firms produce it. See Economies of scope#Economics . Some of the economies of scale recognized in engineering have a physical basis, such as the square–cube law , by which the surface of a vessel increases by the square of the dimensions while the volume increases by the cube. This law has a direct effect on the capital cost of such things as buildings, factories, pipelines, ships and airplanes. In structural engineering,

2016-421: A rate predicted by Moore's law , leading to large-scale integration (LSI) with hundreds of transistors on a single MOS chip by the late 1960s. Following the development of the self-aligned gate (silicon-gate) MOSFET by Robert Kerwin, Donald Klein and John Sarace at Bell Labs in 1967, the first silicon-gate MOS IC technology with self-aligned gates , the basis of all modern CMOS integrated circuits,

2128-547: A relationship somewhat similar to the square–cube law. In some productions, an increase in the size of the plant reduces the average variable cost, thanks to the energy savings resulting from the lower dispersion of heat. Economies of increased dimension are often misinterpreted because of the confusion between indivisibility and three-dimensionality of space. This confusion arises from the fact that three-dimensional production elements, such as pipes and ovens, once installed and operating, are always technically indivisible. However,

2240-407: A reliable means of forming these vital electrical connections to the outside world. After packaging, the devices go through final testing on the same or similar ATE used during wafer probing. Industrial CT scanning can also be used. Test cost can account for over 25% of the cost of fabrication on lower-cost products, but can be negligible on low-yielding, larger, or higher-cost devices. As of 2022 ,

2352-461: A result, numerous studies have indicated that the procurement volume must be sufficiently high to provide sufficient profits to attract enough suppliers, and provide buyers with enough savings to cover their additional costs. However, Shalev and Asbjornse found, in their research based on 139 reverse auctions conducted in the public sector by public sector buyers, that the higher auction volume, or economies of scale, did not lead to better success of

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2464-426: A semiconductor to modulate its electronic properties. Doping is the process of adding dopants to a semiconductor material. Since a CMOS device only draws current on the transition between logic states , CMOS devices consume much less current than bipolar junction transistor devices. A random-access memory is the most regular type of integrated circuit; the highest density devices are thus memories; but even

2576-859: A single IC or chip. Digital memory chips and application-specific integrated circuits (ASICs) are examples of other families of integrated circuits. In the 1980s, programmable logic devices were developed. These devices contain circuits whose logical function and connectivity can be programmed by the user, rather than being fixed by the integrated circuit manufacturer. This allows a chip to be programmed to do various LSI-type functions such as logic gates , adders and registers . Programmability comes in various forms – devices that can be programmed only once , devices that can be erased and then re-programmed using UV light , devices that can be (re)programmed using flash memory , and field-programmable gate arrays (FPGAs) which can be programmed at any time, including during operation. Current FPGAs can (as of 2016) implement

2688-532: A single die. A technique has been demonstrated to include microfluidic cooling on integrated circuits, to improve cooling performance as well as peltier thermoelectric coolers on solder bumps, or thermal solder bumps used exclusively for heat dissipation, used in flip-chip . The cost of designing and developing a complex integrated circuit is quite high, normally in the multiple tens of millions of dollars. Therefore, it only makes economic sense to produce integrated circuit products with high production volume, so

2800-495: A single layer on one side of a chip of silicon in a flat two-dimensional planar process . Researchers have produced prototypes of several promising alternatives, such as: As it becomes more difficult to manufacture ever smaller transistors, companies are using multi-chip modules / chiplets , three-dimensional integrated circuits , package on package , High Bandwidth Memory and through-silicon vias with die stacking to increase performance and reduce size, without having to reduce

2912-482: A six-pin device. Radios with the Loewe 3NF were less expensive than other radios, showing one of the advantages of integration over using discrete components , that would be seen decades later with ICs. Early concepts of an integrated circuit go back to 1949, when German engineer Werner Jacobi ( Siemens AG ) filed a patent for an integrated-circuit-like semiconductor amplifying device showing five transistors on

3024-512: A small piece of semiconductor material, usually silicon . Integrated circuits are used in a wide range of electronic devices, including computers , smartphones , and televisions , to perform various functions such as processing and storing information. They have greatly impacted the field of electronics by enabling device miniaturization and enhanced functionality. Integrated circuits are orders of magnitude smaller, faster, and less expensive than those constructed of discrete components, allowing

3136-733: A unit of capacity of many types of equipment, such as electric motors, centrifugal pumps, diesel and gasoline engines, decreases as size increases. Also, the efficiency increases with size. Operating crew size for ships, airplanes, trains, etc., does not increase in direct proportion to capacity. (Operating crew consists of pilots, co-pilots, navigators, etc. and does not include passenger service personnel.) Many aircraft models were significantly lengthened or "stretched" to increase payload. Many manufacturing facilities, especially those making bulk materials like chemicals, refined petroleum products, cement and paper, have labor requirements that are not greatly influenced by changes in plant capacity. This

3248-440: A variety of organizational and business situations and at various levels, such as a production, plant or an entire enterprise. When average costs start falling as output increases, then economies of scale occur. Some economies of scale, such as capital cost of manufacturing facilities and friction loss of transportation and industrial equipment, have a physical or engineering basis . The economic concept dates back to Adam Smith and

3360-505: A year after Kilby, Robert Noyce at Fairchild Semiconductor invented the first true monolithic IC chip. More practical than Kilby's implementation, Noyce's chip was made of silicon , whereas Kilby's was made of germanium , and Noyce's was fabricated using the planar process , developed in early 1959 by his colleague Jean Hoerni and included the critical on-chip aluminum interconnecting lines. Modern IC chips are based on Noyce's monolithic IC, rather than Kilby's. NASA's Apollo Program

3472-445: Is a correlating relationship between a firm's total sales and underlying efficiency. Firms with higher productivity will always outperform a firm with lower productivity which will lead to lower sales. Through trade liberalization, organizations are able to drop their trade costs due to export growth. However, trade liberalization does not account for any tariff reduction or shipping logistics improvement. However, total economies of scale

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3584-627: Is a historically contingent fact, and not essential to the nature of such enterprises. In the case of agriculture, for example, Marx calls attention to the sophistical nature of the arguments used to justify the system of concentrated ownership of land: Instead of concentrated private ownership of land, Marx recommends that economies of scale should instead be realized by associations : Alfred Marshall notes that Antoine Augustin Cournot and others have considered "the internal economies [...] apparently without noticing that their premises lead inevitably to

3696-477: Is based on the exporters individual frequency and size. So large-scale companies are more likely to have a lower cost per unit as opposed to small-scale companies. Likewise, high trade frequency companies are able to reduce their overall cost attributed per unit when compared to those of low-trade frequency companies. Economies of scale is related to and can easily be confused with the theoretical economic notion of returns to scale. Where economies of scale refer to

3808-411: Is because labor requirements of automated processes tend to be based on the complexity of the operation rather than production rate, and many manufacturing facilities have nearly the same basic number of processing steps and pieces of equipment, regardless of production capacity. Karl Marx noted that large scale manufacturing allowed economical use of products that would otherwise be waste. Marx cited

3920-424: Is expanded, including the aspects concerning the development of knowledge and the organization of transactions, it is possible to conclude that economies of scale do not always lead to monopoly. In fact, the competitive advantages deriving from the development of the firm's capabilities and from the management of transactions with suppliers and customers can counterbalance those provided by the scale, thus counteracting

4032-444: Is low because the chips, with all their components, are printed as a unit by photolithography rather than being constructed one transistor at a time. Furthermore, packaged ICs use much less material than discrete circuits. Performance is high because the IC's components switch quickly and consume comparatively little power because of their small size and proximity. The main disadvantage of ICs

4144-681: Is obsolete. An early attempt at combining several components in one device (like modern ICs) was the Loewe 3NF vacuum tube first made in 1926. Unlike ICs, it was designed with the purpose of tax avoidance , as in Germany, radio receivers had a tax that was levied depending on how many tube holders a radio receiver had. It allowed radio receivers to have a single tube holder. One million were manufactured, and were "a first step in integration of radioelectronic devices". The device contained an amplifier , composed of three triodes, two capacitors and four resistors in

4256-442: Is one where the costs of production fall when the number of firms in the industry drops, but the remaining firms increase their production to match previous levels. Conversely, an industry exhibits an external economy of scale when costs drop due to the introduction of more firms, thus allowing for more efficient use of specialized services and machinery. Economies of scale exist whenever the total cost of producing two quantities of

4368-505: Is possible within a particular country—for example, it would not be efficient for Liechtenstein to have its own carmaker if they only sold to their local market. A lone carmaker may be profitable, but even more so if they exported cars to global markets in addition to selling to the local market. Economies of scale also play a role in a " natural monopoly ". There is a distinction between two types of economies of scale: internal and external. An industry that exhibits an internal economy of scale

4480-608: Is saturating the regional market, thus having to ship products uneconomic distances. Other limits include using energy less efficiently or having a higher defect rate. Large producers are usually efficient at long runs of a product grade (a commodity) and find it costly to switch grades frequently. They will, therefore, avoid specialty grades even though they have higher margins. Often smaller (usually older) manufacturing facilities remain viable by changing from commodity-grade production to specialty products. Economies of scale must be distinguished from economies stemming from an increase in

4592-433: Is that if the capital cost for a given sized piece of equipment is known, changing the size will change the capital cost by the 0.6 power of the capacity ratio (the point six to the power rule ). In estimating capital cost, it typically requires an insignificant amount of labor, and possibly not much more in materials, to install a larger capacity electrical wire or pipe having significantly greater capacity. The cost of

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4704-413: Is the high initial cost of designing them and the enormous capital cost of factory construction. This high initial cost means ICs are only commercially viable when high production volumes are anticipated. An integrated circuit is defined as: A circuit in which all or some of the circuit elements are inseparably associated and electrically interconnected so that it is considered to be indivisible for

4816-476: The dual in-line package (DIP), first in ceramic and later in plastic, which is commonly cresol - formaldehyde - novolac . In the 1980s pin counts of VLSI circuits exceeded the practical limit for DIP packaging, leading to pin grid array (PGA) and leadless chip carrier (LCC) packages. Surface mount packaging appeared in the early 1980s and became popular in the late 1980s, using finer lead pitch with leads formed as either gull-wing or J-lead, as exemplified by

4928-488: The non-recurring engineering (NRE) costs are spread across typically millions of production units. Modern semiconductor chips have billions of components, and are far too complex to be designed by hand. Software tools to help the designer are essential. Electronic design automation (EDA), also referred to as electronic computer-aided design (ECAD), is a category of software tools for designing electronic systems , including integrated circuits. The tools work together in

5040-498: The periodic table of the chemical elements were identified as the most likely materials for a solid-state vacuum tube . Starting with copper oxide , proceeding to germanium , then silicon , the materials were systematically studied in the 1940s and 1950s. Today, monocrystalline silicon is the main substrate used for ICs although some III-V compounds of the periodic table such as gallium arsenide are used for specialized applications like LEDs , lasers , solar cells and

5152-415: The short-run average total cost (SRATC) curve down and to the right. Economies of scale is a concept that may explain patterns in international trade or in the number of firms in a given market. The exploitation of economies of scale helps explain why companies grow large in some industries. It is also a justification for free trade policies, since some economies of scale may require a larger market than

5264-544: The small-outline integrated circuit (SOIC) package – a carrier which occupies an area about 30–50% less than an equivalent DIP and is typically 70% thinner. This package has "gull wing" leads protruding from the two long sides and a lead spacing of 0.050 inches. In the late 1990s, plastic quad flat pack (PQFP) and thin small-outline package (TSOP) packages became the most common for high pin count devices, though PGA packages are still used for high-end microprocessors . Ball grid array (BGA) packages have existed since

5376-416: The switching power consumption per transistor goes down, while the memory capacity and speed go up, through the relationships defined by Dennard scaling ( MOSFET scaling ). Because speed, capacity, and power consumption gains are apparent to the end user, there is fierce competition among the manufacturers to use finer geometries. Over the years, transistor sizes have decreased from tens of microns in

5488-503: The very large-scale integration (VLSI) of more than 10,000 transistors on a single chip. At first, MOS-based computers only made sense when high density was required, such as aerospace and pocket calculators . Computers built entirely from TTL, such as the 1970 Datapoint 2200 , were much faster and more powerful than single-chip MOS microprocessors such as the 1972 Intel 8008 until the early 1980s. Advances in IC technology, primarily smaller features and larger chips, have allowed

5600-417: The "physical" point of view of the returns to scale. Furthermore, supply contracts entail fixed costs which lead to decreasing average costs if the scale of production increases. This is of important utility in the study of corporate finance . Economies of productive capacity balancing derives from the possibility that a larger scale of production involves a more efficient use of the production capacities of

5712-425: The 1970s. Flip-chip Ball Grid Array packages, which allow for a much higher pin count than other package types, were developed in the 1990s. In an FCBGA package, the die is mounted upside-down (flipped) and connects to the package balls via a package substrate that is similar to a printed-circuit board rather than by wires. FCBGA packages allow an array of input-output signals (called Area-I/O) to be distributed over

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5824-482: The 22 nm node (Intel) or 16/14 nm nodes. Mono-crystal silicon wafers are used in most applications (or for special applications, other semiconductors such as gallium arsenide are used). The wafer need not be entirely silicon. Photolithography is used to mark different areas of the substrate to be doped or to have polysilicon, insulators or metal (typically aluminium or copper) tracks deposited on them. Dopants are impurities intentionally introduced to

5936-532: The FOFA concept was simply to interdict Soviet follow-on-forces located 24, 48, and 72 hours removed from NATO defensive positions. The problem was: to coordinate deep battle and air interdiction efforts out to 150 kilometers behind the line of contact, or roughly 72 hours away from it; and to plan for airborne deep strike missions 300 kilometers into the enemy's rear; and developing technology and doctrine to enable commanders quickly to adapt air strikes and fire missions. FOFA

6048-511: The advantages of external economies linked to an increase in the production of an entire sector of activity. However, "those economies which are external from the point of view of the individual firm, but internal as regards the industry in its aggregate, constitute precisely the class which is most seldom to be met with." "In any case - Sraffa notes – in so far as external economies of the kind in question exist, they are not linked to be called forth by small increases in production," as required by

6160-564: The assumption of free competition to address the study of firms that have their own particular market. This stimulated a whole series of studies on the cases of imperfect competition in Cambridge. However, in the succeeding years Sraffa followed a different path of research that brought him to write and publish his main work Production of commodities by means of commodities ( Sraffa 1966 ). In this book, Sraffa determines relative prices assuming no changes in output, so that no question arises as to

6272-431: The auction. They found that auction volume did not correlate with competition, nor with the number of bidders, suggesting that auction volume does not promote additional competition. They noted, however, that their data included a wide range of products, and the degree of competition in each market varied significantly, and offer that further research on this issue should be conducted to determine whether these findings remain

6384-431: The average cost for all firms as opposed to internal economies of scale which only allows benefits to the individual firm. Advantages that arise from external economies of scale include; Firms are able to lower their average costs by buying their inputs required for the production process in bulk or from special wholesalers. Firms might be able to lower their average costs by improving their management structure within

6496-434: The base of dynamic economies of scale, associated with the process of growth of the scale dimension and not to the dimension of scale per se. Learning by doing implies improvements in the ability to perform and promotes the introduction of incremental innovations with a progressive lowering of average costs. Learning economies are directly proportional to the cumulative production ( experience curve ). Growth economies emerge if

6608-508: The capitalist system is therefore characterized by two tendencies, connected to economies of scale: towards a growing concentration and towards economic crises due to overproduction. In his 1844 Economic and Philosophic Manuscripts , Karl Marx observes that economies of scale have historically been associated with an increasing concentration of private wealth and have been used to justify such concentration. Marx points out that concentrated private ownership of large-scale economic enterprises

6720-452: The chemical industry as an example, which today along with petrochemicals, remains highly dependent on turning various residual reactant streams into salable products. In the pulp and paper industry, it is economical to burn bark and fine wood particles to produce process steam and to recover the spent pulping chemicals for conversion back to a usable form. Large and more productive firms typically generate enough net revenues abroad to cover

6832-473: The components of the electronic circuit are completely integrated". The first customer for the new invention was the US Air Force . Kilby won the 2000 Nobel Prize in physics for his part in the invention of the integrated circuit. However, Kilby's invention was not a true monolithic integrated circuit chip since it had external gold-wire connections, which would have made it difficult to mass-produce. Half

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6944-425: The conclusion that, whatever firm first gets a good start will obtain a monopoly of the whole business of its trade … ". Marshall believes that there are factors that limit this trend toward monopoly, and in particular: Piero Sraffa observes that Marshall, in order to justify the operation of the law of increasing returns without it coming into conflict with the hypothesis of free competition, tended to highlight

7056-447: The cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of time . A decrease in cost per unit of output enables an increase in scale that is, increased production with lowered cost. At the basis of economies of scale, there may be technical, statistical, organizational or related factors to the degree of market control. Economies of scale arise in

7168-473: The desktop Datapoint 2200 were built from bipolar integrated circuits, either TTL or the even faster emitter-coupled logic (ECL). Nearly all modern IC chips are metal–oxide–semiconductor (MOS) integrated circuits, built from MOSFETs (metal–oxide–silicon field-effect transistors). The MOSFET invented at Bell Labs between 1955 and 1960, made it possible to build high-density integrated circuits . In contrast to bipolar transistors which required

7280-418: The die must pass through the material electrically connecting the die to the package, through the conductive traces (paths) in the package, through the leads connecting the package to the conductive traces on the printed circuit board . The materials and structures used in the path these electrical signals must travel have very different electrical properties, compared to those that travel to different parts of

7392-536: The diffusion of impurities into silicon. A precursor idea to the IC was to create small ceramic substrates (so-called micromodules ), each containing a single miniaturized component. Components could then be integrated and wired into a bidimensional or tridimensional compact grid. This idea, which seemed very promising in 1957, was proposed to the US Army by Jack Kilby and led to the short-lived Micromodule Program (similar to 1951's Project Tinkertoy). However, as

7504-524: The early 1970s to 10 nanometers in 2017 with a corresponding million-fold increase in transistors per unit area. As of 2016, typical chip areas range from a few square millimeters to around 600 mm , with up to 25 million transistors per mm . The expected shrinking of feature sizes and the needed progress in related areas was forecast for many years by the International Technology Roadmap for Semiconductors (ITRS). The final ITRS

7616-462: The economies of scale due to the increase in size do not depend on indivisibility but exclusively on the three-dimensionality of space. Indeed, indivisibility only entails the existence of economies of scale produced by the balancing of productive capacities, considered above; or of increasing returns in the utilisation of a single plant, due to its more efficient use as the quantity produced increases. However, this latter phenomenon has nothing to do with

7728-434: The economies of scale which, by definition, are linked to the use of a larger plant. At the base of economies of scale there are also returns to scale linked to statistical factors. In fact, the greater of the number of resources involved, the smaller, in proportion, is the quantity of reserves necessary to cope with unforeseen contingencies (for instance, machine spare parts, inventories, circulating capital, etc.). One of

7840-545: The enemy's second and third echelon forces to prevent them from reaching NATO's defensive positions. FOFA was adopted by NATO in November 1984. The defects which were identified for remedy were: Rogers saw the technological basis for change lying in the microchip , which created new possibilities for high-speed, real-time data processing , as well as in micro-electronic sensor technology , notable for important applications in reconnaissance and target acquisition. Operationally,

7952-541: The entire die rather than being confined to the die periphery. BGA devices have the advantage of not needing a dedicated socket but are much harder to replace in case of device failure. Intel transitioned away from PGA to land grid array (LGA) and BGA beginning in 2004, with the last PGA socket released in 2014 for mobile platforms. As of 2018 , AMD uses PGA packages on mainstream desktop processors, BGA packages on mobile processors, and high-end desktop and server microprocessors use LGA packages. Electrical signals leaving

8064-580: The equivalent of millions of gates and operate at frequencies up to 1 GHz . Analog ICs, such as sensors , power management circuits , and operational amplifiers (op-amps), process continuous signals , and perform analog functions such as amplification , active filtering , demodulation , and mixing . ICs can combine analog and digital circuits on a chip to create functions such as analog-to-digital converters and digital-to-analog converters . Such mixed-signal circuits offer smaller size and lower cost, but must account for signal interference. Prior to

8176-422: The factors underlying the ever-increasing concentration of capital. Marx observes that in the capitalist system the technical conditions of the work process are continuously revolutionized in order to increase the surplus by improving the productive force of work. According to Marx, with the cooperation of many workers brings about an economy in the use of the means of production and an increase in productivity due to

8288-410: The firm increase, the notions of increasing returns to scale and economies of scale can be considered equivalent. However, if input prices vary in relation to their quantities purchased by the company, it is necessary to distinguish between returns to scale and economies of scale. The concept of economies of scale is more general than that of returns to scale since it includes the possibility of changes in

8400-518: The firm is a perfect competitor in all input markets, and thus the per-unit prices of all its inputs are unaffected by how much of the inputs the firm purchases, then it can be shown that at a particular level of output, the firm has economies of scale if and only if it has increasing returns to scale, has diseconomies of scale if and only if it has decreasing returns to scale, and has neither economies nor diseconomies of scale if it has constant returns to scale. In this case, with perfect competition in

8512-454: The firm is so big in one or more input markets that increasing its purchases of an input drives up the input's per-unit cost, then the firm could have diseconomies of scale in that range of output levels. Conversely, if the firm is able to get bulk discounts of an input, then it could have economies of scale in some range of output levels even if it has decreasing returns in production in that output range. In essence, returns to scale refer to

8624-435: The fixed costs associated with exporting. However, in the event of trade liberalization, resources will have to be reallocated toward the more productive firm, which raises the average productivity within the industry. Firms differ in their labor productivity and the quality of their products, so more efficient firms are more likely to generate more net income abroad and thus become exporters of their goods or services. There

8736-604: The founder of political economy as an autonomous discipline. John Stuart Mill , in Chapter IX of the First Book of his Principles, referring to the work of Charles Babbage (On the economics of machines and manufactories), widely analyses the relationships between increasing returns and scale of production all inside the production unit. In Das Kapital (1867), Karl Marx , referring to Charles Babbage , extensively analyzed economies of scale and concludes that they are one of

8848-412: The foundry model, fabless companies (like Nvidia ) only design and sell ICs and outsource all manufacturing to pure play foundries such as TSMC . These foundries may offer IC design services. The earliest integrated circuits were packaged in ceramic flat packs , which continued to be used by the military for their reliability and small size for many years. Commercial circuit packaging quickly moved to

8960-568: The highest-speed integrated circuits. It took decades to perfect methods of creating crystals with minimal defects in semiconducting materials' crystal structure . Semiconductor ICs are fabricated in a planar process which includes three key process steps – photolithography , deposition (such as chemical vapor deposition ), and etching . The main process steps are supplemented by doping and cleaning. More recent or high-performance ICs may instead use multi-gate FinFET or GAAFET transistors instead of planar ones, starting at

9072-438: The idea of obtaining larger production returns through the use of division of labor. Diseconomies of scale are the opposite. Economies of scale often have limits, such as passing the optimum design point where costs per additional unit begin to increase. Common limits include exceeding the nearby raw material supply, such as wood in the lumber, pulp and paper industry . A common limit for a low cost per unit weight commodities

9184-579: The idea to the public at the Symposium on Progress in Quality Electronic Components in Washington, D.C. , on 7 May 1952. He gave many symposia publicly to propagate his ideas and unsuccessfully attempted to build such a circuit in 1956. Between 1953 and 1957, Sidney Darlington and Yasuo Tarui ( Electrotechnical Laboratory ) proposed similar chip designs where several transistors could share

9296-479: The increase in the division of labour. Furthermore, the increase in the size of the machinery allows significant savings in construction, installation and operation costs. The tendency to exploit economies of scale entails a continuous increase in the volume of production which, in turn, requires a constant expansion of the size of the market. However, if the market does not expand at the same rate as production increases, overproduction crises can occur. According to Marx

9408-419: The individual phases of the production process. If the inputs are indivisible and complementary, a small scale may be subject to idle times or to the underutilization of the productive capacity of some sub-processes. A higher production scale can make the different production capacities compatible. The reduction in machinery idle times is crucial in the case of a high cost of machinery. A larger scale allows for

9520-421: The late 1990s, radios could not be fabricated in the same low-cost CMOS processes as microprocessors. But since 1998, radio chips have been developed using RF CMOS processes. Examples include Intel's DECT cordless phone, or 802.11 ( Wi-Fi ) chips created by Atheros and other companies. Modern electronic component distributors often further sub-categorize integrated circuits: The semiconductors of

9632-424: The marginalist theory of price. Sraffa points out that, in the equilibrium theory of the individual industries, the presence of external economies cannot play an important role because this theory is based on marginal changes in the quantities produced. Sraffa concludes that, if the hypothesis of perfect competition is maintained, economies of scale should be excluded. He then suggests the possibility of abandoning

9744-433: The number of MOS transistors in an integrated circuit to double every two years, a trend known as Moore's law. Moore originally stated it would double every year, but he went on to change the claim to every two years in 1975. This increased capacity has been used to decrease cost and increase functionality. In general, as the feature size shrinks, almost every aspect of an IC's operation improves. The cost per transistor and

9856-411: The output market the long-run equilibrium will involve all firms operating at the minimum point of their long-run average cost curves (i.e., at the borderline between economies and diseconomies of scale). If, however, the firm is not a perfect competitor in the input markets, then the above conclusions are modified. For example, if there are increasing returns to scale in some range of output levels, but

9968-475: The output. If a mathematical function is used to represent the production function, and if that production function is homogeneous , returns to scale are represented by the degree of homogeneity of the function. Homogeneous production functions with constant returns to scale are first degree homogeneous, increasing returns to scale are represented by degrees of homogeneity greater than one, and decreasing returns to scale by degrees of homogeneity less than one. If

10080-405: The presence of significant economies of scale. This contradiction, between the empirical evidence and the logical incompatibility between economies of scale and competition, has been called the 'Cournot dilemma'. As Mario Morroni observes, Cournot's dilemma appears to be unsolvable if we only consider the effects of economies of scale on the dimension of scale. If, on the other hand, the analysis

10192-450: The price of inputs when the quantity purchased of inputs varies with changes in the scale of production. The literature assumed that due to the competitive nature of reverse auctions , and in order to compensate for lower prices and lower margins, suppliers seek higher volumes to maintain or increase the total revenue. Buyers, in turn, benefit from the lower transaction costs and economies of scale that result from larger volumes. In part as

10304-569: The production of a given plant. When a plant is used below its optimal production capacity , increases in its degree of utilization bring about decreases in the total average cost of production. Nicholas Georgescu-Roegen (1966) and Nicholas Kaldor (1972) both argue that these economies should not be treated as economies of scale. The simple meaning of economies of scale is doing things more efficiently with increasing size. Common sources of economies of scale are purchasing (bulk buying of materials through long-term contracts), managerial (increasing

10416-493: The project was gaining momentum, Kilby came up with a new, revolutionary design: the IC. Newly employed by Texas Instruments , Kilby recorded his initial ideas concerning the integrated circuit in July 1958, successfully demonstrating the first working example of an integrated circuit on 12 September 1958. In his patent application of 6 February 1959, Kilby described his new device as "a body of semiconductor material … wherein all

10528-592: The purposes of construction and commerce. In strict usage, integrated circuit refers to the single-piece circuit construction originally known as a monolithic integrated circuit , which comprises a single piece of silicon. In general usage, circuits not meeting this strict definition are sometimes referred to as ICs, which are constructed using many different technologies, e.g. 3D IC , 2.5D IC , MCM , thin-film transistors , thick-film technologies , or hybrid integrated circuits . The choice of terminology frequently appears in discussions related to whether Moore's Law

10640-400: The reasons firms appear is to reduce transaction costs . A larger scale generally determines greater bargaining power over input prices and therefore benefits from pecuniary economies in terms of purchasing raw materials and intermediate goods compared to companies that make orders for smaller amounts. In this case, we speak of pecuniary economies, to highlight the fact that nothing changes from

10752-506: The same die. As a result, they require special design techniques to ensure the signals are not corrupted, and much more electric power than signals confined to the die itself. Economies of scale 1800s: Martineau · Tocqueville  ·  Marx ·  Spencer · Le Bon · Ward · Pareto ·  Tönnies · Veblen ·  Simmel · Durkheim ·  Addams ·  Mead · Weber ·  Du Bois ·  Mannheim · Elias In microeconomics , economies of scale are

10864-449: The same size – a modern chip may have many billions of transistors in an area the size of a human fingernail. These advances, roughly following Moore's law , make the computer chips of today possess millions of times the capacity and thousands of times the speed of the computer chips of the early 1970s. ICs have three main advantages over circuits constructed out of discrete components: size, cost and performance. The size and cost

10976-441: The same when purchasing the same product for both small and high volumes. Keeping competitive factors constant, increasing auction volume may further increase competition. The first systematic analysis of the advantages of the division of labour capable of generating economies of scale, both in a static and dynamic sense, was that contained in the famous First Book of Wealth of Nations (1776) by Adam Smith , generally considered

11088-426: The scale of production. When the size of the company and the division of labour increase, there are a number of advantages due to the possibility of making organizational management more effective and perfecting accounting and control techniques. Furthermore, the procedures and routines that turned out to be the best can be reproduced by managers at different times and places. Learning and growth economies are at

11200-427: The size of the company and the market structure. It is also necessary to take into account the factors linked to the development of capabilities and the management of transaction costs. External economies of scale tend to be more prevalent than internal economies of scale. Through the external economies of scale, the entry of new firms benefits all existing competitors as it creates greater competition and also reduces

11312-474: The size of the transistors. Such techniques are collectively known as advanced packaging . Advanced packaging is mainly divided into 2.5D and 3D packaging. 2.5D describes approaches such as multi-chip modules while 3D describes approaches where dies are stacked in one way or another, such as package on package and high bandwidth memory. All approaches involve 2 or more dies in a single package. Alternatively, approaches such as 3D NAND stack multiple layers on

11424-446: The specialization of managers), financial (obtaining lower- interest charges when borrowing from banks and having access to a greater range of financial instruments), marketing (spreading the cost of advertising over a greater range of output in media markets ), and technological (taking advantage of returns to scale in the production function). Each of these factors reduces the long run average costs (LRAC) of production by shifting

11536-449: The strength of beams increases with the cube of the thickness. Drag loss of vehicles like aircraft or ships generally increases less than proportional with increasing cargo volume, although the physical details can be quite complicated. Therefore, making them larger usually results in less fuel consumption per ton of cargo at a given speed. Heat loss from industrial processes vary per unit of volume for pipes, tanks and other vessels in

11648-445: The structure of modern societies, made possible by the small size and low cost of ICs such as modern computer processors and microcontrollers . Very-large-scale integration was made practical by technological advancements in semiconductor device fabrication . Since their origins in the 1960s, the size, speed, and capacity of chips have progressed enormously, driven by technical advances that fit more and more transistors on chips of

11760-399: The tendency towards a monopoly inherent in economies of scale. In other words, the heterogeneity of the organizational forms and of the size of the companies operating in a sector of activity can be determined by factors regarding the quality of the products, the production flexibility, the contractual methods, the learning opportunities, the heterogeneity of preferences of customers who express

11872-417: The variation in the relationship between inputs and output . This relationship is therefore expressed in "physical" terms. But when talking about economies of scale, the relation taken into consideration is that between the average production cost and the dimension of scale. Economies of scale therefore are affected by variations in input prices. If input prices remain the same as their quantities purchased by

11984-556: The variation or constancy of returns. In 1947, DuPont engineer Roger Williams, Jr. (1930-2005) published a rule of thumb that costs of chemical process are roughly proportional to the tonnage in power ~0.6 . In the following decades it became widely adopted other engineering industries and terrestrial mining, sometimes (e. g., in electrical power generation) with modified exponential scaling factors. It has been noted that in many industrial sectors there are numerous companies with different sizes and organizational structures, despite

12096-401: Was a 16-transistor chip built by Fred Heiman and Steven Hofstein at RCA in 1962. General Microelectronics later introduced the first commercial MOS integrated circuit in 1964, a 120-transistor shift register developed by Robert Norman. By 1964, MOS chips had reached higher transistor density and lower manufacturing costs than bipolar chips. MOS chips further increased in complexity at

12208-441: Was developed at Fairchild Semiconductor by Federico Faggin in 1968. The application of MOS LSI chips to computing was the basis for the first microprocessors , as engineers began recognizing that a complete computer processor could be contained on a single MOS LSI chip. This led to the inventions of the microprocessor and the microcontroller by the early 1970s. During the early 1970s, MOS integrated circuit technology enabled

12320-505: Was issued in 2016, and it is being replaced by the International Roadmap for Devices and Systems . Initially, ICs were strictly electronic devices. The success of ICs has led to the integration of other technologies, in an attempt to obtain the same advantages of small size and low cost. These technologies include mechanical devices, optics, and sensors. As of 2018 , the vast majority of all transistors are MOSFETs fabricated in

12432-440: Was the first " systems-of-systems " architecture. As of 2015 nearly 100 FOFA systems were integrated into the mix available to battle commanders. Microchip An integrated circuit ( IC ), also known as a microchip , computer chip , or simply chip , is a small electronic device made up of multiple interconnected electronic components such as transistors , resistors , and capacitors . These components are etched onto

12544-480: Was the largest single consumer of integrated circuits between 1961 and 1965. Transistor–transistor logic (TTL) was developed by James L. Buie in the early 1960s at TRW Inc. TTL became the dominant integrated circuit technology during the 1970s to early 1980s. Dozens of TTL integrated circuits were a standard method of construction for the processors of minicomputers and mainframe computers . Computers such as IBM 360 mainframes, PDP-11 minicomputers and

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