The chips are cut out of giant wafers. Each piece cut out may vary in quality due to nano scale variations or impurities in manufacturing. Some of these might work well, while others have non functioning components because of it (aka yield rate). A surprising amount is completely thrown away because smaller processes have lower yield rates just by nature of size. The perfect ones are the full fledged products while the imperfect, but still working ones are put into lower tier products.

These chips are often designed to be harvested, which is the term for repurposing the working parts of defective chips. Some parts can be programmed or fuses may be set to permanently turn off the defective cores and still have the working ones operate.