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Five basic problems are associated with microscale circuits: power dissipation, thermal generation and its effects on component packing density, compatibility, adjustability and reliability. Power dissipation and its relation to circuit functions is discussed in detail and specific circuit problems are used as examples of the principles. Furthermore, it is shown that the power dissipation problems are fundamental and relate generally to all classes of electronic components. Power dissipation and heat generation are then related to packing density to determine the physical limitations of microelectronic fabrication.