alt Hacker NewsThere’s an expected amount of defects per wafer. If a chip has a defect, then it is lost (simplification). A wafer with 100 chips may lose 10 to defects, giving a yield of 90%. The same wafer but with 1000 smaller chips would still have lost only 10 of them, giving 99% yield.
As another comment referenced in this thread states, Cerebras seems to have solved by making their big chip a lot of much smaller cores that can be disposed of if they have errors.