Initially chips were designed transistor by transistor. This was possible as they only had a few thousand. These transistors are arranged in useful groups like AND gates or a Registers. There are a ton of these that can be made out of transistors.
As chips became more complex the two were separated somewhat. You would have teams of engineers making the gates or slightly more complex things and then other teams of engineers making the actual chip logic out of those puzzle pieces.
Getting even more complex you now add in software that is designed to help assemble the parts into efficient designs.
Modern chips have billions to tens of billions of transistors. Engineers make the core parts and software scales those parts up to the billions needed.
This is all just designing the chip in software. Physically making the chip is even harder. Chips made with cutting edge technology have parts that are at the atomic level. A transistor is only 70 silicon atoms long and that info is likely outdated.
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