It’s possibly one of the hardest ELI5s I’ve seen, but I’ll do my best.
Processors are based on small “valve” like structures called transistors, for the sake of simplicity these have basically two states ON(one) and OFF(zero), if you get a bunch of these together you can do basic logic, and on top of that basic logic you can build software but that would be a different ELI5 altogether.
These transistor are made of silicon, a type of rock (it’s a crystal), to build the we carve this rock, but since we need to carve very thin and fine structures we can’t do it with mechanical tools (they are big and clumsy), so we use chemicals.
But we need to be precise on what we destroy and what we keep, this process is called lithography.
We start with a very well polished rock, a flat one called an ingot, we slice it to get a wafer, literally a thin slice of this rock.
So now we need to be able to keep some of the wafer and destroy the rest (around the chip area, think of it as engraving something), we do this by covering the wafer in a film that is light sensitive, meaning the light will weaken the film and make it easy to remove with chemicals, while the rest of the film is kept.
We project the pattern (inverted, light will remove the things we don’t want) of the structures called transistors into the film covered wafer, and then use chemicals to remove the film we don’t want on top of the wafer.
Then we use more chemicals to destroy the silicon not protected by the film.
Then we use very fine machinery to cut (many chips are made at the same time), check, etc.
This is only a layer so we need to repeat this process several time until we have a sandwich that has everything necessary, think of a building, needs several floors to have a functioning hospital.
Then we package, test, program the sandwich.
And then they send it to the smartphone assembler, that will solder it onto your future smartphone.
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