How do 'Project References' solve scalability issues in Monorepos?

Project References allow you to structure a TypeScript project into smaller, independent pieces that can be compiled incrementally.

In massive codebases, a single tsconfig.json becomes a performance bottleneck because the compiler must load every file to resolve types. Project References (using the composite flag) enable logical boundaries. They allow the compiler to use pre-built declaration files (.d.ts) for dependencies instead of re-parsing source code. This significantly reduces memory usage and build times in CI/CD pipelines.