When two insulation coated wires cross each other, they create a very small capacitor (micro-capacitor).The two wires act as capacitance plates and the two layers of insulation, separating the wires, acts as an insulating dielectric. The capacitance value of this crossing point is easily measured, and changes in the capacitance value, when a finger approaches, can be used to detect the closeness of that finger. Projected Capacitance enables the example in the diagram to detect a finger many centimeters away.

These micro-capacitors can be used in isolation, as single finger detectors, or they can be formed into an array, as keypads or touchscreens that can detect fingers by proximity. Interpolation can be used to detect the position of fingers between these micro-capacitors. A 16 I/O x/y wire based touchscreen may, for example, be formed as a matrix of 8 vertical and 8 horizontal crossings, creating a micro-capacitor touchscreen with 64 touch sensing nodes. Alternatively, the 16 I/Os may be formed as a diagonal matrix of 120 unique unique touch sensing nodes.

The touchscreen film can be stuck to a sheet of glass or plastic, with mild adhesive, or static, for sensing through the glass.