The number you're talking about is the minimum distance between wires/FETs on an ASIC/VLSI chip like the P4. The smaller the number, the more transistors can be fit on a single chip in the same space. Therefore, generally speaking, the smaller process allows for faster chips to be produced since electric signals don't have to go as far. So a chip built on a 90nm process can be faster than one on a 130nm process, but not necessarily. There are a lot of other factors, like chip design.
The speed of light and laws of thermodynamics are rapidly becoming issues, but I imagine we'll see 10nm or smaller processes in the next couple years.
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