Tech stocks are struggling to hold onto any substantial move right now, especially with disappointing earnings, record inflation, recession talks, and more.

Even with the market attempting to climb as we head into December, talks that the Fed might ease off in the face of a cooling economy are slowly starting to fade.

Tough language from Fed members showing a commitment to taming the inflation beast dashed those hopes, with a strong likelihood of further hikes in November and December, shows that the central bank means to walk the walk. 

The change has created a tough environment for investors, but in the longer term, taming inflation will benefit. Rising prices have broadly hit the economy, including semiconductors.

The base material used to build computer chips—wafers of silicon—have jumped in price. 

Nvidia (NASDAQ: NVDA) CEO Jensen Huang says that they’re “a ton more expensive,” and the company is raising prices on its GPU chips as a result. 

Huang went further in a media call a few days ago. “Moore’s Law is dead,” he said. 

In case you’re not familiar, Moore’s Law is the long-standing trend in the semiconductor industry in which, every couple of years, the number of transistors packed on a computer chip doubles, and prices for chips fall by half in terms of chip performance.

With prices rising on basic materials used to make those chips, however, the long-standing fall in prices on the end semiconductor products is breaking down—despite gains in performance. 

For a few hundred bucks, we walk around with computing power in our pockets today that it would have taken millions of dollars to buy not that many years ago. For decades, we’ve gotten used to getting more for less from the chip industry, and those improvements have fueled an economic boom running from the final decades of the 20th century down to our own time. 

According to Huang, however, that’s over. Basically, nearly 60 years of technologically driven deflation in the semi industry is coming to an end.

I’m not so pessimistic… 

Companies all across the globe are currently engaged in a massive race to bring the next level of computing to market. 

Hundreds of billions of dollars are being invested in the US and elsewhere to secure not only future capacity but also performance. 

With the market downturn, many semis are becoming incredibly cheap… 

At today’s price, for example, you can buy Intel for under $30 and enjoy a dividend of over 5% in a company that is planning a big expansion under its current CEO, an expansion that will bring a new generation of semiconductor technology for manufacturing on our own shores.

For decades, we’ve been hearing warnings of the imminent end of Moore’s Law. 

But like clockwork, the competitive and cooperative semiconductor ecosystem comes up with ways to boost performance while lowering prices. In turn, the superior semiconductors enable a bunch of lucrative new applications that weren’t practical previously. 

I suspect we’ll see a repeat.

Yes, eventually we will hit the physical limits to what we can build using silicon. As it is, the next generation of chips will be built at scales used to measure atoms and molecules. 

But off in the distance, emerging innovators are working on ways to one day replace ordinary silicon with other materials that promise greater potential performance. If there’s been one safe bet in semis over the past 60 years, it’s to never bet against innovation. 

Never bet against Moore’s Law.