To understand how Ivy reduces the bundle size, you will first need to understand how the View Engine works. When you compile any of your components using the View Engine, say for instance example.component, you basically get two JavaScript files. They are the example.component.js file which consists of the compiled TypeScript code and example.component.ngfactory.js file which is a static representation of the template code. So here, there will be a mapping of these two files which consumes a much longer build time.
So, the Angular team decided that the second file, i.e the .ngfactory.js file, can be removed by just adding the template code within the JavaScript code itself. The Ivy makes use of function calls rather than iterating over each element as in the View Engine.
