A method is provided for etching thin film circuits or semiconductor chips to produce well defined vertically etched walls at rapid etching rates. The substrates to be etched are covered by masks and positioned on a cathode electrode enclosed in a container. Also enclosed in the container is a chemically-reactive gas used as an etchant. According to the method the cathode is negative-biased to ionize the reactive gas and attract the chemically reactive ions toward the cathode. These reactive ions impinge on the substrates in a predominantly vertical direction to produce well defined vertically etched walls.