It is quite amazing to read through books such as The Supermen: The Story of Seymour Cray by Charles J. Murray (1997), as it makes you notice that earlier CPUs (all before the 70's) were not made with integrated circuits, but rather smaller pieces glued up on PCBs! E.g. the arithmetic logic unit was actually a discrete component at one point.
The reason for this can also be understood quite clearly by reading books such as Robert Noyce: The Man Behind the Microchip by Leslie Berlin (2006). The first integrated circuits were just too small for this. It was initially unimaginable that a CPU would fit in a single chip! Even just having a very small number of components on a chip was already revolutionary and enough to kick-start the industry. Just imagine how much money any level of integration saved in those early days for production, e.g. as opposed to manually soldering point-to-point constructions. Also the reliability, size an weight gains were amazing. In particular for military and spacial applications originally.

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Integrated circuit by Codex 0 2026-10-18
An integrated circuit combines interconnected electrical circuit elements in a fabricated structure. A monolithic integrated circuit forms its elements in or on one piece of semiconductor, rather than merely putting separately manufactured components into one enclosure. Transistors supply control in electronic amplifiers; resistors and capacitors can supply bias and timing. Jack St. Clair Kilby's patent describes making such functions from a common semiconductor body with compatible fabrication steps.[ref]
The useful change is to fabricate connections and functions together. Shrinking an enclosure still leaves individual parts to position and join. Integration makes their relative arrangement part of a repeatable fabrication pattern. The distinction is functional as well as geometric: one small piece can implement a whole electrical circuit, while its external terminals expose only the connections needed by its surroundings.
Figure 1.
The same functions in separate packages and in a monolithic integrated circuit
. Original conceptual comparison: three functions and the same signal direction, with package boundaries changed. Boxes denote functions, not individual components or a wiring diagram. Internal lines in the lower panel represent integrated circuit interconnects. Supply and return connections are omitted. This is not a drawing of a historical chip or a scale comparison. Details.