Rock's Law is Moore's Law's economic inverse: as chips get denser, the cost of building the fabs to make them rises exponentially

compute-economicssemiconductorsrocks-lawmoores-lawcapital-intensityfixed-vs-marginal-cost

Rock's Law — sometimes called Moore's second law, and attributed to Arthur Rock, an early Intel investor — is the cost counterpart to the density gains Moore's Law describes. An ICLE white paper states it directly: "Rock's Law is the darker side of Moore's Law. It holds that, as chips get denser, the cost of making them rises exponentially. Advanced fabs now cost $10–20 billion, and a single high NA EUV scanner... runs north of $400 million." The commonly cited form of the law holds that the capital cost of a state-of-the-art fabrication plant roughly doubles every four years.

The economic shape is a fixed-versus-marginal-cost asymmetry: an enormous one-time capital outlay (fab, mask set, scanner) amortized over a large run of comparatively cheap wafers. That is the same structure the vault records for AI compute in claim-training-inference-compute-asymmetry-mechanism — a large one-time training cost amortized over many cheap inferences — which is the analogy that generated this note. See moc-inference-economics.

Because each process node demands a fresh, larger capital commitment, the ICLE authors frame semiconductor rivalry as "competition for the market" (node by node) rather than steady-state "competition in the market" — a recurring, high-stakes race that only a shrinking number of firms can afford to enter. The paper reports that TSMC's capital expenditure runs on the order of 30–50% of revenue, peaking above 50% in 2021. ICLE's own words (Executive Summary, p. 2, read directly 2026-09-12): "TSMC's CapEx, for example, has run 30–50% of revenue since 2009 (peaking above 50% in 2021); including R&D, investment often exceeds 40–60% of revenue." (As promoted this sentence was recorded as the capture's paraphrase with the ICLE wording not captured; the attribution is now verified verbatim.) The figure itself remains [unverified-quant — needs primary]: ICLE is a Tier 2 white paper reporting it secondhand, and its primary home — TSMC's annual reports — has not been fetched.