Microchannel heat exchangers are heat exchangers with a tube diameter of less than 1 mm. Conventional cooling approaches such as the forced‐air cooling technique fail in high technological compact systems because of the small‐sized surfaces of chips and circuits. In comparison, microchannel heat exchangers are being extensively utilized in compact‐sized devices where a high heat‐transfer medium is required. Moreover, consumers' continued desire for compact products has prompted researchers to study microchannel heat exchangers for their ability to boost the rate of heat transfer that ensures the safety of compact designs. This study presents the evaluation of performance parameters and the manufacturing aspects of microchannel heat exchangers. This study also examines how microchannel heat exchangers are affected by several parameters, including the type of working fluid used, Brownian motion, geometry of the channel, Reynolds number, Nusselt number, Knudsen number, wall resistance of the channel, the effect of gravity, and inlet and outlet arrangement for fluid. Investigating the various geometries for the microchannel indicates that the least pressure drop occurs in square shape cross‐section channels while the highest pressure drop occurs in channels with triangular cross‐sections. Moreover, it has been observed that, with the addition of nanoparticles to the working fluid, the thermal properties of the exchangers as well as the pressure drop increases while at the same time it reduces the boundary layer thickness. In addition, the Reynolds number affects the performance irrespective of the channel geometry. When the fluid is added with nanoparticles, like, Al2O3 and copper oxide (CuO) with different volumetric fractions (φ) of 0%, 0.5%, 1%, 1.5%, and 2%, the performance of the microchannel rises with rising the Reynolds number but conversely when the fluid is used in pure form the performance decreases with the rising value of Reynolds number. In addition, it has been observed that the overall improvement is obtained at φ = 2% and Re = 100 for CuO–water nanofluid. Apart from this, the least heat transfer is recorded at φ = 0.5% and Re = 1.00 for both nanofluids. Moreover, this study concludes that the Nusselt number is independent of the Reynolds number in the regime of laminar flow. It is further evident that as the nanoparticle size reduces, the Nusselt number rises when all the remaining conditions are the same. Apart from this, investigating the inlet/outlet arrangement through finite volume method for D‐, I‐, N‐, S‐, U‐, and V‐type arrangements, it is evident that the V‐type sink has overall greater performance. In terms of gravity, it is observed that it has no effect on the performance of microchannel heat exchangers. This study further illustrates the effects of the fabrication method on the performance of the microchannel heat exchangers.