How can computer chips be made smaller?

A computer chip is an assembly of a large number of individual transistors, which in turn are arranged as switches. The driving configuration of a switch consists of resistors and capacitors. In order to make these components smaller, they may be made to operate at a higher frequency. Since the actual quantity of energy used to change the state of a switch becomes smaller, this also has the serendipitous outcome of needing less cooling per switch. This necessarily demands that the manufacturing process become capable of even smaller and more dense layout.