Is smaller always better?

But we all like Moore, don't we?

Pardon the pun.

Moore's law is the observation that the number of transistors in a dense integrated circuit doubles approximately every two years.
Moore's prediction has proved accurate for several decades, and has been used in the semiconductor industry to guide long-term planning and to set targets for research and development.(Self fulfilling prophecy?)

Just how do they do it?

For reference the HIV virus is 120 nm in diameter; so it's quite genius how it's done.
Here's a wikipedia link: https://en.wikipedia.org/wiki/Semiconductor_device_fabrication

Here's my TL;DR:
They coat a wafer(a thin slice of silicon) with a substrate.
Then using a magnifier and light, they etch the design of the features onto the substrate using light projected through a mask.

The areas that were exposed to the light are washed away leaving only the photoresist.Later, the photoresist is then washed away to leave only the substrate.

Here's a super TL;DR

After this process they are interconnected to form the desired electrical circuits. Although it does seem like an exact science, yields can be as low as 30%. The proportion of devices on the wafer found to perform properly is referred to as the yield. That's why the labs look like a lab used by an evil corporation to carry out experiments on other people:They need to be spotless.

Party is over

The party is about to come to an end; processors are about to hit their physical limits along with the Laws of Physics.
The smallest, commercially manufacturable, chip fabrication process is the 10nm(like the snapdragon 845). The 7nm scale technology is expected in 2019(See if Moore's Law holds up). Any smaller and Physics wags it's fingers at us in disapproval.
Ah, the effects of quantum tunnelling. The transistors would be so close together that the electron would just skip to the other side, which defeats it's purpose, and would never have an off state.
Granted, there are smaller transistors: How about a single atom?(https://en.wikipedia.org/wiki/Single-atom_transistor).
It would be difficult to produce at a large scale.

Wait, why what about photonic integrated circuits?

Why is a smaller process better?

• It will require a smaller silicon chip, thus less expensive to manufacture.
• It will be more power efficient.

Yes, Moore's Law is going to be broken. (Don't be sad because it ended, be happy because it happened - Dr.Seuss).

Review
Transistors are hitting physical limits.
Smaller, more efficient processors are coming to your phones.
Photonic ICs, which use light rather than electrons, may be the future.