Designers are running into physical limits: heat, leakage and the time needed to move data between parts of a processor now matter as much as transistor count.
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Complex · 10 min read
The deeper explanation
The answer follows the chain of production, transport, rules and bargaining power that connects a local outcome to global supply.
The immediate chain is specific to What happens when computer chips can no longer keep getting smaller? : Shrinking transistors improved speed, cost and energy efficiency for decades. Atomic-scale effects, heat and manufacturing complexity are slowing traditional scaling. New progress increasingly comes from specialised designs, advanced packaging and new materials.
The system is constrained by the conditions described in the story. For decades, smaller transistors made computers faster and cheaper. Physical limits are now pushing chipmakers toward new designs, materials and packaging. Understanding the deeper picture means connecting technical capability with infrastructure, cost, safety, regulation and the choices people make about deployment. The outcome depends on which pressures are strongest, which resources are available and how the people or institutions involved respond.
The situation can change when the relevant actors alter their behaviour, when a key resource becomes scarce or available, or when a rule changes who can act and at what cost.
The consequences extend beyond the immediate question. Chip progress shapes the price and capability of phones, vehicles, AI, industry and national security.
A systems view makes the longer mechanism visible: Starting conditions: Evidence, available capability and access set the starting position before the technology reaches everyday use. Limits and trade-offs: Rules, capacity and competing priorities limit which responses are practical, even when several options look possible. Choices and distribution: The outcome depends on who can change those conditions and how its consequences are shared.
For What happens when computer chips can no longer keep getting smaller?, the practical outcome turns on Starting conditions, Limits and trade-offs, Choices and distribution. Those details determine what each participant can do next and how the result changes over time. The visible outcome is therefore the end of a chain: a decision changes access to a resource, that change alters behaviour, and the new behaviour affects the next decision.
Why it matters
Chip progress shapes the price and capability of phones, vehicles, AI, industry and national security.
The economics of the next chip
The replacement technologies—chiplets, advanced packaging and new materials—depend on specialist equipment, research laboratories and factories that cost billions to build.
Cloud companies, phone makers and AI developers create the sales that fund this investment; when development costs rise, progress follows the markets large enough to pay for it.
Story collection
6 questions to explore
Open a question to read its explainer and follow the linked questions in this collection.
Meet the players
Progress is spreading across transistor design, chip assembly, new materials and access to equipment. These six players control different ways of moving beyond simple miniaturisation.
TSMC
Makes and packages other companies’ chips
Wants tomake customers’ increasingly complex chip designs manufacturable at a workable cost.
Read profile: TSMC
Taiwan Semiconductor Manufacturing Company operates factories used by designers such as AMD. Its 3DFabric technologies also connect separate pieces of silicon side by side or in stacks, so progress need not come only from smaller transistors.
Customers must design within the processes and packaging options a factory can reliably deliver. TSMC, in turn, depends on equipment suppliers and on manufacturing enough working chips from each batch. A design that works on paper is not automatically economical to produce.
What to watchWhether new packaging and transistor processes deliver enough working products to justify their cost.
ASML
Supplies machines that pattern tiny circuits
Wants tohelp chip factories print finer features accurately and repeatedly.
Read profile: ASML
ASML builds lithography machines: they project a circuit pattern onto a light-sensitive coating on a silicon wafer. Its extreme-ultraviolet machines use very short-wavelength light to pattern tiny features.
ASML depends on specialist suppliers, including ZEISS for precision optics. Its customers still need many other manufacturing steps to turn a printed pattern into working chips. Dutch export licences also determine which controlled machines it can ship abroad, so technical capability alone does not determine access.
What to watchWhether sharper patterning delivers reliable factory output, and where export licences allow the equipment to go.
AMD
Builds processors from connected chiplets
Wants toincrease computing performance without making every processor one enormous, costly piece of silicon.
Read profile: AMD
AMD splits some processors into smaller pieces called chiplets. Different functions can use different manufacturing processes, reserving the newest, more expensive process for the parts that benefit most.
That changes the task from simply shrinking a chip to connecting its pieces efficiently. Communication between chiplets and packaging add design challenges. AMD relies on external manufacturers, including TSMC, so its launch plans also depend on factory capacity and the proportion of chips that pass testing.
What to watchWhether faster connections between chiplets preserve the performance and cost advantages of splitting a processor.
Intel
Changes transistor design and chip assembly
Wants tokeep improving processors through new transistor structures, power delivery and packaging.
Read profile: Intel
Intel’s RibbonFET design surrounds the transistor’s conducting channel with its controlling gate. PowerVia moves power connections to the back of the chip, freeing space for signal wiring. Its Foveros technology stacks chip pieces.
These approaches change the shape and arrangement of a processor rather than relying solely on smaller features. But the parts must still be manufactured, connected, powered and cooled together. Intel’s factories and its chip designers therefore have to solve several engineering problems at once.
What to watchHow transistor, power-delivery and packaging improvements work together in manufactured processors.
Sources: [1]
imec
Tests what could come after today’s silicon
Wants toturn promising transistor materials into processes that chip factories could use.
Read profile: imec
This Belgian research organisation works with manufacturers and equipment makers. In June 2026, imec, TSMC and ASML reported transistors using atomically thin materials on industry-standard 300-millimetre wafers.
Making a promising laboratory device is different from producing reliable commercial processors. Materials must survive the manufacturing sequence and work consistently across a wafer. Collaboration lets researchers test those obstacles against factory requirements; the demonstration does not mean silicon has already been replaced.
What to watchWhether experimental materials remain reliable when integrated into a complete manufacturing process.
Sources: [1]
Dutch government
Licenses exports of controlled chip equipment
Wants tolimit sensitive uses of advanced chipmaking equipment while avoiding unnecessary disruption to the industry.
Read profile: Dutch government
Because ASML exports from the Netherlands, Dutch licensing decisions matter to access to controlled equipment. Rules expanded in April 2025 to include specified measurement and inspection tools as well as existing controls.
Applications are assessed individually for exports covered by these rules to destinations outside the EU; this is not a blanket ban on every machine. The government can restrict a shipment, but it cannot remove the manufacturing difficulties faced by a factory that receives one.
What to watchWhich equipment requires permission and whether licences are granted for particular destinations and uses.
Sources: [1]
Lisa Su
AMD chief executive shaping chiplet and advanced-computing strategy
Wants toincrease computing performance while keeping complex designs manufacturable
LeverageProduct strategy, engineering investment and relationships with foundries.
Read profile: Lisa Su
As AMD’s chief executive, Lisa Su has made chiplet-based processors and advanced packaging central to the company’s product strategy. Her decisions matter because progress can come from connecting several pieces of silicon, not only shrinking one piece.
She can direct product priorities and engineering investment, but AMD depends on foundries, packaging capacity, equipment and customers. Manufacturing yield and the cost of connecting chiplets constrain what the strategy can deliver.
What to watchWhether AMD’s packaging choices deliver a performance advantage without making processors too expensive to manufacture.
Portrait: image source
Morris Chang
TSMC founder whose foundry model changed chip production
Wants tobuild a manufacturing model in which designers can use an independent specialist foundry
LeverageA production model that separated chip design from ownership of the factory.
Read profile: Morris Chang
Morris Chang founded TSMC and helped establish the specialist foundry model: one company designs a chip while another manufactures it for many customers. That structure explains why a small number of factories can influence the entire industry.
He no longer runs TSMC day to day, so his role is historical rather than operational. The model he created still shapes dependence on manufacturing capacity, process technology and long-term investment.
What to watchWhether the foundry model can remain resilient as fabrication becomes more expensive and strategically contested.
Sources: [1]
Portrait: image source
Sources & visual credits
- TSMC · 3DFabric stacking and advanced packaging
- ASML · How lithography works
- ZEISS · Optics inside EUV lithography systems
- AMD · Chiplet architecture explained (PDF)
- AMD · 2025 annual filing, manufacturing dependencies
- Intel · Transistors, power delivery and advanced packaging
- imec · Joint 2D-material transistor research, 15 June 2026
- Dutch government · Equipment export licensing, effective April 2025 (Dutch)
Flags and logos identify the actors; they do not imply endorsement.
- TSMC wordmark — Wikimedia Commons. Public-domain artwork; applicable trademarks remain with their owners.
- ASML logo — Wikimedia Commons. Public-domain artwork; applicable trademarks remain with their owners.
- AMD logo — Wikimedia Commons. Public-domain artwork; applicable trademarks remain with their owners.
- Intel logo — Wikimedia Commons. Public-domain artwork; applicable trademarks remain with their owners.
- imec logo — Butterslides, Wikimedia Commons, CC BY-SA 4.0. SVG wrapper and metadata cleaned; artwork unchanged.
- Dutch flag — Wikimedia Commons. Public-domain artwork; applicable trademarks remain with their owners.
System lens
What makes this more complicated?
Three layers that help explain what changes the outcome.
Starting conditions
Evidence, available capability and access set the starting position before the technology reaches everyday use.
Limits and trade-offs
Rules, capacity and competing priorities limit which responses are practical, even when several options look possible.
Choices and distribution
The outcome depends on who can change those conditions and how its consequences are shared.
What happens next?
Possible paths from here
Explore the topic
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Use this question to continue the explanation at the depth you selected.
Analyse this story as a connected technical and social system. Cover the underlying mechanism, infrastructure, maturity, safety, economics, regulation, access, unintended consequences and the largest sources of uncertainty.
10 essential words
TransistorA tiny electronic switch used to process information.
SemiconductorA material whose electrical behaviour can be controlled.
LithographyThe process used to pattern extremely small chip features.
ChipletA small specialised chip combined with others in one package.
Process nodeA label for a generation of chip manufacturing technology.
PrototypeAn early version built to test an idea.
ScaleMoving a technology from limited trials to widespread use.
InfrastructureThe physical and digital systems a technology depends on.
RegulationRules governing how a technology may be developed or used.
Trade-offA choice in which gaining one benefit can create another cost.
Editorial transparency
What is established, interpreted and still open?
The sources establish the capability, limits and governance questions surrounding the technology.
Performance, cost, safety and adoption remain uncertain as systems develop.
The explanation connects the immediate question to the institutions and choices around it.
What happens next will depend on testing, deployment choices, governance and who can access the technology.
Evidence behind the explanation
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