Making chips smaller is very hard at the nanometer sizes, and it requires the kind of expert equipment made by one single Dutch company (ASML) and expertise only the likes of Taiwan's TSMC have.

Stacking means keeping the same size, but adding more of it so it matches the same compute power as the more advanced smaller chip designs.

China (who is banned from buying from ASML) is currently pursuing stacking as a short to medium term strategy until they can catch up to TSMC.

https://policy.economy.ac/news/2025/11/202511284344

Computer chips go faster