The amount of L1 cache hasn't increased at nearly the rate the clockrate has increased.
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30K of Wikipedia text isn't as helpful as an explanation of why too large of a cache is less optimal. When the cache gets too large the latency to find an item in the cache (factoring in cache misses) begins to approach the latency of looking up the item in main memory. I don't know what proportions CPU designers aim for, but I would think it is something analogous to the 80-20 guideline: You'd like to find your most common data in the cache 80% of the time, and the other 20% of the time you'll have to go to main memory to find it. (or whatever the CPU designers intended proportions may be.)
EDIT: I'm sure it's nowhere near 80%/20%, so substitute X and 1-X. :)
One factor is that L1 fetches start before the TLB translations are complete so as to decrease latency. With a small enough cache and high enough way the index bits for the cache will be the same between virtual and physical addresses. This probably decreases the cost of maintaining memory coherency with a virtually-indexed, physically-tagged cache.
Cache size is influenced by many factors:
Speed of electric signals (should be if not the speed of light, something of same order of magnitude):
Economic cost (circuits at different cache levels may be different and certain cache sizes may be unworth)
If L1 cache size didn't changed after 64kb it's because it was no longer worth. Also note that now there's a greater "culture" about cache and many programmers write "cache-friendly" code and/or use prefetech instructions to reduce latency.
I tried once creating a simple program that was accessing random locations in an array (of several MegaBytes): that program almost freezed the computer because for each random read a whole page was moved from RAM to cache and since that was done very often that simple program was draining out all bandwith leaving really few resources for the OS.
I believe it can be summed up simply by stating that the bigger the cache, the slower the access will be. So a larger cache simply doesn't help as a cache is designed to reduce slow bus communication to RAM.
Since the speed of the processor has been increasing rapidly, the same-sized cache must perform faster and faster in order to keep up with it. So the caches may be significantly better (in terms of speed) but not in terms of storage.
(I'm a software guy so hopefully this isn't woefully wrong)
From L1 cache:
The Level 1 cache, or primary cache, is on the CPU and is used for temporary storage of instructions and data organised in blocks of 32 bytes. Primary cache is the fastest form of storage. Because it's built in to the chip with a zero wait-state (delay) interface to the processor's execution unit, it is limited in size.
SRAM uses two transistors per bit and can hold data without external assistance, for as long as power is supplied to the circuit. This is contrasted to dynamic RAM (DRAM), which must be refreshed many times per second in order to hold its data contents.
Intel's P55 MMX processor, launched at the start of 1997, was noteworthy for the increase in size of its Level 1 cache to 32KB. The AMD K6 and Cyrix M2 chips launched later that year upped the ante further by providing Level 1 caches of 64KB. 64Kb has remained the standard L1 cache size, though various multiple-core processors may utilise it differently.
EDIT: Please note that this answer is from 2009 and CPUs have evolved enormously in the last 10 years. If you have arrived to this post, don't take all our answers here too seriously.
Actually L1 cache size IS the biggest bottleneck for speed in modern computers. The pathetically tiny L1 cache sizes may be the sweetspot for the price, but not the performance. L1 cache can be accessed at GHz frequencies, the same as processor operations, unlike RAM access 400x slower. It is expensive and difficult to implement in the current 2 dimensional design, however, it is technically doable, and the first company which does it successfully, will have computers 100's of times faster and still running cool, something which would produce major innovations in many fields and are only accessbile currently through expensive and difficult to program ASIC/FPGA configurations. Some of these issues are to do with proprietary/IP issues and corporate greed spanning now decades, where a puny and ineffectual cadre of engineers are the only ones with access to the inner workings, and who are mostly given marching orders to squeeze out cost-effective obfuscated protectionist nonsense. Overly privatized research always leads to such technologic stagnation or throttling (as we have seen in aerospace and autos by the big manufacturers and soon to be pharma). Open source and more sensible patent and trade secret regulation benefiting the inventors and public (rather than the company bosses and stockholders) would help here a lot. It should be a no-brainer for development to make much larger L1 caches and this should and could have been developed decades ago. We would be a lot further ahead in computers and many scientific fields using them if we had.