Why China is betting big on chiplets

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Why China is betting big on chiplets

By Zeyi Yang | MIT Technology Review | February 6, 2024

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For the past couple of years, US sanctions have had the Chinese semiconductor industry locked in a stranglehold. While Chinese companies can still manufacture chips for today’s uses, they are not allowed to import certain chipmaking technologies, making it almost impossible for them to produce more advanced products.

There is a workaround, however. A relatively new technology known as chiplets is now offering China a way to circumvent these export bans, build a degree of self-reliance, and keep pace with other countries, particularly the US.  In the past year, both the Chinese government and venture capitalists have been focused on propping up the domestic chiplet industry. Academic researchers are being incentivized to solve the cutting-edge issues involved in chiplet manufacturing, while some chiplet startups, like Polar Bear Tech, have already produced their first products.

In contrast to traditional chips, which integrate all components on a single piece of silicon, chiplets take a modular approach. Each chiplet has a dedicated function, like data processing or storage; they are then connected to become one system. Since each chiplet is smaller and more specialized, it’s cheaper to manufacture and less likely to malfunction. At the same time, individual chiplets in a system can be swapped out for newer, better versions to improve performance, while other functional components stay the same.  Powerful companies in the chip sector, like AMD, Intel, and Apple, have already used the technology in their products. 

If China can’t buy or make a single piece of a powerful chip, it could connect some less-advanced chiplets that it does have the ability to make. Together, they could potentially achieve a similar level of computing power to the chips that the US is blocking China from accessing, if not more.

Combining several less-advanced chips might give a performance boost to China’s chip technologies and stand in for the advanced ones that it can’t access, but it won’t be able to produce a chip that’s far ahead of existing top-line products. And as the US government constantly updates and expands its semiconductor sanctions, the chiplet technologies could become subject to restrictions too.

With all the practical and political obstacles, the development of chiplets will still take some time, no matter how much political will and investment is poured into the sector.   It may be a shortcut for the Chinese semiconductor industry to make stronger chips, but it won’t be the magic solution to the US-China technology war.

3 key takeaways from the article

1. For the past couple of years, US sanctions have had the Chinese semiconductor industry locked in a stranglehold. While Chinese companies can still manufacture chips for today’s uses, they are not allowed to import certain chipmaking technologies, making it almost impossible for them to produce more advanced products.
2. There is a workaround, however. A relatively new technology known as chiplets is now offering China a way to circumvent these export bans, build a degree of self-reliance, and keep pace with other countries, particularly the US.  
3. With all the practical and political obstacles, the development of chiplets will still take some time, no matter how much political will and investment is poured into the sector.  It may be a shortcut for the Chinese semiconductor industry to make stronger chips, but it won’t be the magic solution to the US-China technology war.

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Topics:  Technology, China, USA, Semiconductor, Chiplets