Small Dies, Big Dreams: Challenges and Opportunities in Chiplet Commoditization

By Amit Kedia, Business Development, Samsung Semiconductor

(Abstract)

The semiconductor industry is undergoing a revolutionary shift towards chiplet-based architectures, offering enhanced flexibility, cost-effectiveness, and performance over traditional monolithic chip designs. However, the journey towards widespread adoption and commoditization is complex. This paper explores the challenges impeding the near-term commoditization of the chiplet ecosystem, emphasizes the critical role of economies of scale, and incorporates market insights to provide a comprehensive overview of the chiplet landscape.

1. INTRODUCTION

Chiplets have emerged as a promising approach to semiconductor design and manufacturing. By breaking down a complex system into smaller, modular components called chiplets, manufacturers can achieve improved yield, reduced costs, and faster time-to-market. Major semiconductor companies are already investing heavily in chiplet-based designs. For instance, AMD's EPYC server processors have successfully leveraged chiplet architecture to enhance performance and reduce costs.

In recent years, numerous companies have emerged, focusing on developing specialized chiplets for various functions, including compute, input/output (IO), and memory. This trend represents a shift in System-on-Chip (SoC) design, particularly for specialized applications like artificial intelligence (AI). The core idea behind this chiplet-based approach is that companies developing SoCs for specific applications can concentrate on designing critical components while sourcing other necessary chiplets from the broader ecosystem. These various chiplets can then be integrated using advanced packaging technologies such as multi-chip modules (MCM) or 2.5D/3D packaging. The advantages of this approach include:

• Reduced Development Time: By focusing on core competencies and leveraging pre-existing chiplets for other functions, companies can significantly accelerate their product development cycles.
• Cost Efficiency: The ability to mix and match chiplets can lead to more cost-effective designs, as not every component needs to be manufactured using the most advanced (and expensive) process nodes. This approach is called heterogeneous integration.
• Flexibility and Customization: Chiplet-based designs allow for greater flexibility in creating tailored solutions for specific applications or markets.
• Improved Yield: By manufacturing smaller chiplets rather than monolithic dies, companies can potentially improve manufacturing yields and reduce waste.

The growing importance of chiplets in the semiconductor industry is evident. According to a report published by Market.US, the global chiplets market generated nearly USD 3.1 billion in revenue in 2023. Over the next decade, the chiplet industry is projected to grow at a 42.5% CAGR, reaching a valuation of USD 107.0 billion by 2033 (https://market.us/report/chiplets-market). Despite these promising aspects and market opportunities, the chiplet ecosystem remains in its infancy and faces several significant challenges.

2. CHALLENGES IMPEDING CHIPLET COMMODITIZATION

The path to chiplet commoditization is paved with multifaceted challenges spanning technological, economic, and organizational domains. These obstacles are interconnected, creating a complex landscape for the industry to navigate. Key challenges include:

A. Lack of Standardization and Interoperability One of the primary challenges in commoditizing the chiplet ecosystem is the lack of standardization and interoperability among different chiplet designs and manufacturing processes. Unlike the mature and standardized ecosystem of commodity components like memory modules (JEDEC), chiplets often require custom interfaces and protocols to ensure seamless integration and communication. The absence of industry-wide standards for chiplet interconnects, packaging, and testing hinders the development of a commoditized market.

B. Intellectual Property (IP) and Licensing Complexities Chiplet designs often incorporate proprietary IP from multiple vendors, complicating the establishment of a commoditized ecosystem. IP licensing agreements, royalties, and legal considerations add complexity to the chiplet supply chain. The need for custom IP blocks and associated licensing costs makes achieving the price points and flexibility required for commoditization difficult.

C. Design Complexity and Customization Requirements Chiplet-based designs often involve complex architectures and custom layouts to optimize performance, power efficiency, and functionality. The level of customization required for specific applications limits the potential for commoditization. Each chiplet design may require unique features, interconnects, and integration strategies, making it challenging to develop a one-size-fits-all solution.

D. Manufacturing and Supply Chain Constraints The production of chiplets necessitates sophisticated packaging methodologies, including 2.5D and 3D integration, which are both costly and restricted to a select few organizations with substantial financial resources. Moreover, the scarcity of foundries and packaging service providers capable of handling chiplet-based designs creates a bottleneck, limiting the scalability and widespread availability of chiplet solutions. This concentration of capabilities among a few well-funded players poses a significant barrier to entry for smaller firms and hinders the democratization of chiplet technology across the broader semiconductor industry.

3. THE CRUCIAL ROLE OF ECONOMIES OF SCALE

Overcoming the challenges facing the chiplet ecosystem and advancing towards commoditization depends critically on achieving economies of scale and establishing industry-wide standards. Economies of scale enable chiplet-based solutions to target a wider range of applications and markets. As cost and complexity barriers are reduced, chiplets can be adopted in diverse domains, from high-performance computing and data centers to automotive and consumer electronics. This market expansion creates more opportunities for commoditization.

As the chiplet ecosystem matures and scales, it attracts more participants, including IP providers, design tool vendors, and manufacturing partners. The growth of the ecosystem fosters innovation, competition, and the development of a robust supply chain, all of which are essential for commoditization. Advancements in standardization and interoperability are also crucial for the maturation of the chiplet ecosystem. As industry adoption grows, collaborative efforts to develop standardized interfaces, protocols, and packaging solutions have gained momentum.

Key standardization efforts include the Universal Chiplet Interconnect Express (UCIe), which focuses on creating an open ecosystem for chiplet-based designs, and the Open Compute Project (OCP), which extends its scope to chiplet standardization in high-performance computing applications. These collective efforts are driving the industry towards a more unified approach to chiplet design and integration, paving the way for increased interoperability, reduced costs, and accelerated innovation.

From a cost perspective, it is important to decide whether to use homogeneous integration with the most advanced nodes or to leverage older nodes for less critical components, opting for heterogeneous integration. This consideration is vital for achieving cost efficiency.

3. CONCLUSION

The chiplet ecosystem promises to revolutionize semiconductor design. While challenges in standardization, IP licensing, design complexity, and manufacturing impede immediate commoditization, market growth and adoption are promising. Achieving economies of scale is crucial. Industry efforts, like those by UCIe and major players, are vital. Several semicoductor chip startup, is democratizing chip design with its chiplet “catalog”. Strategic collaboration and innovation can commoditize the chiplet market, enabling widespread adoption and driving innovation across domains. The semiconductor landscape stands on the brink of transformation, with a fully realized chiplet ecosystem closer than ever.