Steel Microstructure knifeopedia
Microstructure (as explained under steel production) is of crucial importance in knife steel, as it has a major impact on sharpness and toughness of the blade. Among others, it's the size, amount and distribution of carbides that makes the difference. There are two groups of carbides:
Primary carbides, formed during solidification of steel after casting in steel production, which can't be eliminated through heat treatment
Secondary carbides, formed during heat treatment and thus impacted by it
Primary carbides are not as deeply embedded into the steel microstructure than secondary carbides. As a result, when you have a knife with larger primary carbides on a thin cutting edge at an acute angle, primary carbides will be exposed on the edge and will fall off when pressure is applied. Also secondary carbides may break out from the edge, although not as easily as primary carbides.
As explained in the section about the cutting edge, a blade with a narrow angle on the cutting edge will be sharper. Apart from the ability to hold an acute angle (related to the steel hardness), the steel microstructure defines how acute the angle of a cutting edge can be, without the risk of chipping incurring, and thus how sharp a knife can become.
Subsequently, a knife with a good microstructure would be one with small, evenly dispersed carbides, where the edge can be taken to an acute angle without increasing the risk of chipping.
Below an micrograph of 440C, a commonly used high carbon steel, showing primary and secondary carbides:
And here an illustration of how chipping would occur due to primary carbides on a cutting edge:
Areas of chipping