Very-large-scale integration (VLSI) is the process of creating an integrated circuit (IC) by combining thousands of transistors into a single chip. In other words, an IC has many transistors on one chip, while VLSI has very many transistors on one chip. A modern VLSI chip is a complex beast with billions of transistors, millions of logic gates deployed for computation and control.
Engineers manage to design these complicated chips by making use of computer aided design (CAD) tools that take an abstract description of the chip, and refines it step-wise to a final design. Designing a VLSI chip involves steps like logic synthesis, timing analysis, floor planning, placement and routing, verification, and testing.