Why do consumer digital cameras have such small sensors?
Sensor manufacturing is similar to logic chip manufacturing, which means that the cost of the device grows dramatically with the area of the device. (Larger area, means greater chance of defects, which means high reject rate, which means higher cost. See this great Java demo for a graphical demonstration of how yields drop.) Most of the progress in microchips in the past several decades has addressed the problem of making denser chips, which means that more stuff is crammed into the same amount of space. The number of defects per unit area, has not improved dramatically. Thus, microprocessors, RAM and sensors have stayed more or else the same physical size over the past few decades even as the amount of content per unit area has gown exponentially. Smaller chips allow camera manufacturers to enjoy other economies: They can use smaller lenses, which reduces the cost of the optics, and it lets them make smaller, lighter cameras. Most consumers prefer smaller, lighter cameras.
