Very-Large-Scale Integration (VLSI) of systems of transistor-based circuits into integrated circuits on a single chip first occurred in the 1980s as part of the semiconductor and communication technologies that were being developed.
The first semiconductor chips held one transistor each. Subsequent advances added more and more transistors, and as a consequence more individual functions or systems were integrated over time. The microprocessor is a VLSI device.
The first "generation" of computers relied on vacuum tubes. Then came discrete semiconductor devices, followed by integrated circuits. ICs had more than one device on a single chip - diodes, transistors, resistors and capacitors (no inductors though), making it possible to fabricate one or more logic gates on a single device. The fourth generation consisted of Large-Scale Integration, i.e. systems with at least a hundred logic gates. The natural successor to LSI was VLSI (thousands of gates on a single chip). Current technology has moved far past this mark and today's microprocessors have several million gates.