The global market for processor microchips that use chiplets in their manufacturing process will expand to 5.8 billion in 2024, increasing by a factor of nine from 645 million in 2018, according to Omdia.

Restoring Moore's Law:
Moore's Law states that the number of transistors that can be placed on a single silicon chip doubles every two years due to the continuous advancement of semiconductor manufacturing technology. However, in recent years, the doubling rate has slowed to approximately two and a half years as semiconductor production processes have encountered physical limitations at extremely small sizes.

Chiplets effectively circumvent Moore's Law by replacing a single silicon die with multiple smaller dies that work together in a unified solution. This approach provides significantly more silicon for adding transistors compared to a monolithic microchip. As a result, chiplets are expected to enable a return to the two-year doubling cycle that has underpinned the economics of the semiconductor business since 1965.

“When semiconductor pioneer Gordon Moore first published his theory on semiconductor advancement, he provided a key forecasting benchmark that established a development cycle for the entire technology industry,” says Tom Hackenberg, principal analyst, embedded processors, at Omdia. “From software developers and systems designers to technology investors, everyone for decades relied on the rapid two-year timeline defined by Moore’s Law. With the advent of chiplets, the semiconductor business and those who depend on it now have the opportunity to return to the usual rate of progress that has generated so much economic value for the broader technology industry.”.

Chiplets are receiving a warm welcome from microprocessor vendors.
Chiplets are being adopted in more advanced and highly integrated semiconductor devices, namely microprocessors (MPUs), system-on-a-chip (SoC) devices, graphics processing units (GPUs), and programmable logic devices (PLDs). The MPU segment represents the single largest market for chiplets among the different types of microchip products. The global market for chiplet-enabled MPUs is expected to expand to $2.4 billion by 2024, up from $452 million in 2018.

“To remain competitive, MPU manufacturers must always stay at the forefront of semiconductor manufacturing technologies,” Hackenberg says. “These companies have the most to lose with the slowdown of Moore’s Law. Because of this, these companies are among the early adopters of chiplets and are likely to be major contributors to chiplet standardization efforts.”.

MPU vendors like Intel and AMD are early innovators building proprietary advanced package chiplets. Intel is also a member of the Open Compute Project Foundation's Open Domain-Specific Architecture (OCP ODSA), which promotes the development of standards and technologies that help enable advanced packaging strategies.

With the rapid adoption of MPUs, the computing segment is expected to be the dominant application market for chiplets through 2024. Computing will account for 96 percent of revenue in 2020 and 92 percent by 2024. (input chart)
In the long term, Omdia expects chiplet revenue to continue expanding and reach $57 billion by 2035.

Much of this growth will be driven by chiplets that serve as heterogeneous processors—chips that combine different processing elements, such as application processors that integrate graphics, security engines, artificial intelligence (AI) acceleration, low-power Internet of Things (IoT) controllers, and more.

“Chiplets may not single-handedly save Moore’s Law, but they represent an innovative and emerging approach that helps advance new packaging technologies, new design strategies, and new materials,” Hackenberg says. “This exciting new approach may also enable a more competitive landscape with diverse contributors. Chiplets will reinforce the cadence that Moore conveyed in his original 1965 paper. The significance of that original statement wasn’t really about how microprocessors grow in performance. Rather, it was about establishing an industry guideline for a cadence that system designers, software developers, and investors could count on to drive the innovation engine. This is the aspect of Moore’s Law that will live on.”.