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If you look at the recent history of computers and microchips, the technology has gotten much smaller, faster, and less expensive.  Moore's Law basically states that the number of transistors that can be manufactured and arranged on a microchip in a cost effective manner will double roughly once every two years.

The rule has held up quite well over time, although some say the technology has to plateau sooner or later.  The Law has completely gone beyond what the man who originally uttered the formula could have imagined, as that was in 1965:

The complexity for minimum component costs has increased at a rate of roughly a factor of two per year... Certainly over the short term this rate can be expected to continue, if not to increase. Over the longer term, the rate of increase is a bit more uncertain, although there is no reason to believe it will not remain nearly constant for at least 10 years. That means by 1975, the number of components per integrated circuit for minimum cost will be 65,000. I believe that such a large circuit can be built on a single wafer.

You can apply the same rule outside of the computing world as well, if you look at the advancement in technology with DVD players or iPods, where they became faster, had more capacity and capability, and yet they became less expensive.

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