Wafer

It is made by melting silicon and letting it harden into a thick column, then slicing it thin and polishing it as smooth as a mirror. Circuits are drawn onto this disc layer by layer, and when it is done, it is cut into individual chips. The latest chips are mostly made on wafers 300 mm (about 12 inches) across.

The bigger the disc, the more chips come from it at once, and the lower the cost. On the other hand, if each chip is big, fewer come from one disc. This is one reason large AI chips are expensive. The number of wafers is also used as a unit for how much a factory can make in a month.

It is like cutting cookies out of rolled-out dough with a cutter. The wider the dough (wafer) and the smaller the cutter (chip), the more cookies you get from one sheet.

A chip factory's capacity is described as how many wafers it makes per month. Knowing this word lets you understand the numbers in articles about expanding a factory or about production falling short.