An integrated circuit is a collection of very small components etched onto a silicon wafer. The wafer is then cut out and placed into a package usually made out of plastic or ceramic and connected to leads with small wires.
The integrated circuit was independently invented in 1959 by both Jack Kilby of Texas Instruments and Robert Noyce of Fairchild Semiconductor. (about.com) Their invention led to the modern integrated circuit, devices with millions of transistors and incomprehensible computing power.
Some popular ICs