Reducing the collision domain size can be the result of installing network devices (usually switches and/or network bridges) that use microsegmentation.
Unlike network hubs and regular repeaters that usually broadcast every single packet, LAN switches are able to filter and forward packets by their MAC address (Media Access Control). The switch basically reads the 48-bit MAC address from the network card and is able to filter or stop frames inside the LAN or a certain network domain.
A switch or network bridge will forward frames with addresses that are not in its domain, and will duplicate and broadcast frames to the devices inside its network.
A router can also filter, forward or drop packets based on the MAC addresses, but it can also act based on the Internet Protocol (IP). Routers also act on reducing the collision domain by broadcasting to the LAN only packets that have addresses on that certain network. These network devices are able to route or redirect packets not only by the IP or MAC addresses, but also by the data type (email, graphics, plain text), function or port used (FTP, HTTP, SMTP, POP3) and other variables and functions (acting like a firewall) in order to improve the performance and also reduce the number of collisions and control/limit users.
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