How do 'Project References' optimize build performance in massive Monorepos?

Project References allow a codebase to be split into independent pieces, enabling incremental compilation via declaration files.

In large projects, a single tsconfig.json forces the compiler to load every file to resolve types, leading to high memory usage. Project References allow you to define dependencies between sub-projects. When a dependency project is built, it produces .d.ts files. The consuming project then only needs to read these small declaration files rather than re-parsing the entire dependency source, significantly speeding up build times and enabling logical boundaries[cite: 1].