The big problem is that the the chip industry's market is shrinking in the long-term. As hardware has gotten faster ('fast enough'), the need for custom hardwar

The big problem is that the the chip industry's market is shrinking in the long-term. As hardware has gotten faster ('fast enough'), the need for custom hardware solutions has reduced, since you can more easily and cheaply do things in software. Similarly the need for faster general-purpose hardware has also reduced, at least in the consumer space, hence the constantly dropping ASPs of desktops and laptops. Emerging markets like China help, but only while penetration there is still low. And since we all pick the fastest path to riches, investors as well as engineers flock to Google/Facebook/etc. Combined with us reaching natural limits of Moore's law (using Si at least), we aren't likely to see nearly the same leaps in the next two decades as we've seen in the past two. Disclaimer: I was in the chip industry and recently moved into webapps with my startup