Processor, CPU, microprocessor, chip:

A processor is the integrated circuitry on a tiny piece of silicon that processes the instructions to make a computer work.

A processor was formerly called a central processing unit (CPU). If the processor is in a personal computer or a handheld device, it's called a microprocessor. Since it is the size of a dime, a microprocessor is often called a chip. Chips contain thousands, or even millions, of interconnected transistors, which work together to store and manipulate data. The functions a microprocessor, or chip, performs are determined by software.

The first microprocessor was the Intel 4004, introduced in 1971. The 4004 was not very powerful - all it could do was add and subtract, and it could only do that four bits at a time. But it was amazing that everything was on one chip. Prior to the 4004, engineers built computers either from collections of chips or from discrete components (transistors wired one at a time). The 4004 powered one of the first portable electronic calculators.

The first microprocessor to make it into a home computer was the Intel 8080, a complete 8-bit computer on one chip introduced in 1974. The first microprocessor to make a real splash in the market was the Intel 8088, introduced in 1979 and incorporated into the IBM PC (which first appeared in 1982 or so).