Moore's Law, named after Gordon Moore the co-founder of Intel, states that the number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every two years. This allows our computers to get faster and faster whilst costing us less. We've enjoyed the benefits of this phenomena since the integrated circuit was invented in the 1950's. However, recently we've started to run up against the physical limitations of miniaturizing these circuits. Put simply you can't continue to miniaturize for ever as eventually you come down to circuits the size of atoms.
Wired reports that a company, called Applied Materials in Santa Clara California (aka Silicon Valley), has perfected a technique for creating transistors that are "22 nanometers wide, as opposed to the current standard of about 45 nanometers." So it seems that Moore's Law may be safe for a few more years yet. You can read about the entire process in the Wired article.