hi I know that SNPs occur almost once in every 1,000 nucleotides on average, which means there are roughly 4 to 5 million SNPs in a person's genome!
So I want to know On what basis SNPs selected for generating chips ?
They are selected in such a way as to strike a balance between clinical and research utility, but this is obviously going to vary from chip design to chip design. As far as I am aware, some SNPs are manually curated, while others are not. If you would like concise technical information, would it not be better to consult the technical 'white papers' provided by the chip manufacturers, or, indeed, contact the manufacturers directly? There is no reason why anybody here on Biostars would have a faithful answer to this question unless they worked on the design team for one of these chip manufacturers.
Note that one can build a customised array, if one wishes.
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SNP's are likely selected based on how probes designed for them will perform. Sequences are public and so are some of the methods to determine secondary structures in oligos/melting temp etc. Companies probably have their own in house tools that they use along with prior information about how their proprietary chips/probes behave. They need to ensure that the chips will work in customer's hands around the world as experimental rigor/conditions may vary.
At the end of the day as a customer you want a good balance of sensitivity and specificity.