Shrinks actually increase current leakage and consequently increase heat output in the modern processes. That is why Intel used high-k oxide and metal-gate transistors first. Chip design was the biggest challenge of the past and it is still as important but today's biggest challenge is process design. If AMD had been selling 45nm chips not since the beginning of 2009 but since late 2007, like Intel, their financial situation could have been much better today. They could have stayed as a "chip-maker" instead of transitioning into a "chip-designer" by spinning-off their fabs.

See the following links
http://kn.theiet.org/magazine/issues...hrink-0818.cfm
http://www.intel.com/technology/silicon/high-k.htm