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| http://www.gilder.com/ | Issue 292.0/April 27,
2007
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HEADLINES:
- The
Week / Burger: Don’t Convert to
ENER—Yet
- Friday
Feature / Metcalfe: It's All In Your Head
- Friday Blogger Bonus / Karlgaard: Earth Is Becoming More Hospitable
- Readings /
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The
Week / Don’t Convert to ENER—Yet
Gilder Tech Analyst Charlie Burger, Gilder Technology Report
(4/11/07): Energy Conversion Devices (ENER) had been
working on its chalcogenide-based phase-change memory technology, called ovonic
unified memory (OUM), for more than two decades when in 1999 pivotal Micron (MU)
executives Tyler Lowrey and Ward Parkinson co-founded Ovonyx in order to
commercialize Energy’s proprietary memory chips. Veterans of the semiconductor
memory industry, Parkinson co-founded Micron in 1978 and served as its first
chairman and CEO, while Lowrey led operations and research for the ascendant
memory maker over a period of 14 years.
When
Ovonyx was formed, Energy exclusively licensed its memory technology to the
venture, which it jointly owns with Lowrey, Intel (INT), BAE Systems,
and STMicroelectronics (STM). In return for its one-third ownership of
Ovonyx, Energy has invested $1.5 million in the company while reaping losses of
$1.3 million, including trickles of revenue from services provided to the joint
venture and from the 0.5 percent of annual gross revenue that Energy is
entitled to receive. (Ovonyx is paid license and service fees as well as
royalties.)
But
after years in the desert, OUM may be ready to blossom with the promise of reading
and writing data 500 times faster than today’s flash memory along with the
prospect of extending the battery life of portable devices. Licensee Intel
expects to sample 90-nanometer, 128-megabit OUM-based memory before summer,
with mass production to follow by the end of the year. The chip can survive
over 100 million read-write cycles and store data for longer than a decade.
As
part of the greening of OUM, Ovonyx expects to secure more licensees. For
instance, late last year the venture granted a new license to Qimonda
(QI), formerly the memory operation of Infineon (IFX), to commercialize
OUM through a joint research program with IBM (IBM) and Macronix
(MXIC) of Taiwan. The companies demonstrated a prototype phase-change memory
device with dimensions of just 20 nm, a geometry not expected to be fabricated
on a mass scale for another eight years.
Can
you cash in on OUM?
Read Charlie’s
complete Energy Conversion Devices (ENER) analysis. Log on now with your GTR
subscriber ID at http://www.gildertech.com/.
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Friday Feature / It's All In Your Head
Robert Metcalfe, Forbes.com (05.07.07): The latest supercomputer is way faster than
the human brain. But guess which is smarter?
Networks rock, especially electronic ones. In the history of the world there
has been nothing like them--telegraph, telephone, cellular mobile, broadcast
radio, cable television, Internet--to democratize the global, political
economy, to bring us prosperity and freedom.
Astonishing as they are, electronic networks can't hold a synaptic spark to the
human brain. We know this intuitively--that the intelligence from the brain's
network of neurons makes even the most advanced supercomputers look pitifully
stupid. And yet, this paradox: Why is it that a comparison of the components
goes the other way? When you stack neurons up against modern transistors in
switching speed, the brain looks pathetic.
Let
me make a stab at resolving this brain-supercomputer contradiction by bringing
up the network effect, as it is quantified in a 25-year-old, and still
controversial, law that has my name attached.
The
network effect, according to Wikipedia, "causes a good or service to have
a value to a potential customer which depends on the number of other customers
who own the good or are users of the service." In the early 1980s I used
an early description of this phenomenon to sell my invention, Ethernet, via
3Com Corp.
Using
a 35mm slide (see chart below), I argued that my customers needed their
Ethernets to grow above a certain critical mass if they were to reap the
benefits of the network effect. 3Com sold $1,000 cards that connected desktop
computers into a network. Here was the payoff: The cost of installing the cards
at, say, a corporation would be proportional to the number of cards installed.
The value of the network, though, would be proportional to the square of
the number of users. Multiply the number of networked computers by ten and your
systemwide cost goes up by a factor of ten but the value goes up a hundredfold.
Why
should that be so? The network effect says that the value of that Ethernet card
to the person on whose desk it sits is proportional to the number, N, of other
computer users he can connect to. Now multiply this value by the number of
users, and you have a value for the whole operation that is roughly
proportional to N 2.
I
was a little vague about what "value" was, but in those days it had
something to do with sharing expensive disks and printers, exchanging
electronic mail within buildings and, for a pioneering few, access to what
would later be called the Internet. My 3Com customers believed me and bought
more Ethernets, which proved to be more valuable, and so they told their
friends and bought even more. Ethernet became a standard in 1982, and 3Com went
public in 1984. And now Internet plumbers are adding more than 10 8
Ethernet switch ports (wall sockets) per year--over a quarter-billion last
year.
Now
here's some earlier history. Decades before Ethernet, IBM's Herbert Grosch
wrote that the performance of computers grew as the square of their cost.
Grosch's Law: Bigger computers are better. If you want to design an airplane
wing or predict the weather, put a lot of iron in one place. In 1965 Intel
cofounder Gordon Moore turned that formula inside out. He famously wrote that
transistor densities would double about every two years. In other words, in
computing smaller is better. Moore proved right. In 1993 George Gilder, seeking
to quantify the network effect, uncovered a slide from my 1980s Ethernet sales
presentation and the formula saying that value is proportional to N 2.
He christened it Metcalfe's Law. It says that bigger networks are better….
Read Metcalfe’s complete commentary:
http://members.forbes.com/forbes/2007/0507/052.html
____________________________________
Friday Blogger Bonus / Earth Is Becoming More Hospitable
Rich Karlgaard (4/25/07): John Stossel, citing an article in the April Freeman
magazine by John Semmens of Arizona's Laissez Faire Institute, has grabbled
hold of a big, big truth.
The
planet is not becoming less hospitable. It is becoming more so. Thanks to
technology and economic progress.
But
the Greens, particularly in Europe, now ask us to put brakes on technology and
economic progress until these can be proven to do no harm to the environment.
From the Green viewpoint, technology and economic progress are assumed to be
guilty until proven innocent. This is known as the "precautionary
principle," and it sounds safe and cozy. But Stossel puts the lie to that.
The
money quote: The
first victims of these [precautionary] principles are the poor. We rich
Westerners can withstand a lot of policy foolishness. But people in the
developing world live on the edge, so anything that retards economic
progress--including measures to arrest global warming--will bring incredible
hardship to the most vulnerable on the planet.
If we care about human life, we should celebrate Economic Progress Day.
Absolutely
right, Stossel!
Check
out Rich’s “Digital Rules” blog:
http://blogs.forbes.com/digitalrules/
____________________________________
Readings /
Andy
Kessler: Trust Me (NYT)
http://www.andykessler.com/
The Weekly
GTI
http://www.gtindex.com/
John Rutledge: Asian Energy Security
http://www.rutledgecapital.com/Articles/20070403_asia_energy_1.html
Dell swaps hard drives for flash
in more notebooks
http://www.eetimes.com/news/latest/showArticle.jhtml;jsessionid=5ELVZ04GSHHOGQSNDLSCKHA?articleID=199201518
Toshiba reports record high sales
despite NAND price drop
http://www.eetimes.com/news/latest/showArticle.jhtml;jsessionid=5ELVZ04GSHHOGQSNDLSCKHA?articleID=199201990
EU Galileo GPS Net. Faster, Higher, Stronger.
http://blog.wired.com/gadgets/2007/04/eu_galileo_gps_.html
Vista's OK. But Microsoft May Not Be
http://www.forbes.com/technology/2007/04/25/vista-microsoft-earnings-tech-cx_bc_0426microsoft.html
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