On April 19, 1965, the 36-year-old head of R&D at seminal Silicon Valley firm Fairchild Semiconductor published a prediction in a trade magazine, Electronics. The researcher claimed that the number of components—that is, transistors—on a single computer chip would continue to double every year, while the cost per chip would remain constant.

“Integrated circuits will lead to such wonders as home computers—or at least terminals connected to a central computer—automatic controls for automobiles, and personal portable communications equipment,” that researcher, Gordon Moore, wrote.

Moore's Law is both the imperative that propels tech companies forward and the standard by which they must abide in order to stay afloat in the industry.

At the time, Moore thought the prediction would hold true for a decade—from 60 components on a single silicon chip to 65,000 by 1975. That year, he revised his forecast down to a doubling every two years. Moore went on to cofound a little company called Intel, which would become the number one semiconductor company in the world. Today, fifty years later, the dictum now famously known as Moore’s Law has withstood the test of time.

“In the beginning, it was just a way of chronicling the progress,” Moore, now 86 years old, said in an interview posted by Intel. “But gradually, it became something that the various industry participants recognized as something they had to stay on or fall behind technologically.”

Over the past five decades, the surge in computing power predicted by Moore’s Law has paralleled the trajectory of innovation in Silicon Valley. Computers were once the size of a room. Now smartphones with more processing power than NASA imagined it would need to send a man to the moon can easily fit in your pocket. When Moore first made his prediction, transistors were about the size of an eraser at the end of a pencil. Now, six million can fit into the period at the end of this sentence. The consistency with which more powerful chips have confirmed Moore's Law has given companies the confidence to invest in the development of complementary technologies, from displays, sensors, and memory to digital imaging devices, software, and the internet. All the while, prices per unit of power keep falling.

Great Expectations

But the reliability of Moore's Law has also shaped expectations. Today, consumers all but demand that their gadgets get faster, cheaper, and more compact in step with Moore’s Law. It’s both the imperative that propels tech companies forward and the standard by which they must abide in order to stay afloat in the industry.

What's more, that expectation now extends, fairly or not, beyond gadgets to new innovations in cloud computing, the internet, social media, search, streaming video, and more. According to Dan Hutchenson, head of chip market research outfit VLSI Research, the market value of the companies across the spectrum of technologies beholden to Moore’s Law amounted to a whopping $13 trillion in 2014—one-fifth of the asset value of the world’s economy.

As a result, Moore’s Law also means companies are in constant competition with their own progress, says Steve Brown, a strategist with Intel. Lucky for them, Brown says, Moore's Law is not a fact of nature. “It’s more of an aspiration and a belief system,” he says. It's that belief that drives technology companies to outdo themselves year after year, Brown says—a belief held by both themselves and their customers.

Beyond the advance of computing technology itself, the surge in computing power predicted by Moore’s Law has led to Moore's Law-like transformations in other industries, including healthcare, pharmaceuticals, and genetics. Many drugs have been tested “in the minds of computers,” as Brown puts it. Computer software can analyze the human genome in minutes.

And it's these advances, Brown believes, that might be the most important of all. "Ultimately, it won’t be about making a better, faster smartphone,” he says. “We may eventually discover how to make more food, create better living conditions and connect more people together. Moore’s Law could be key to unlocking that.”