Chiplets is a term used to refer to chips designed for higher performance. At this point, chiplet production is an essential component of U.S. industrial policy. But ramping up chiplet production domestically is about to become a major challenge. 

Starting 50 years ago, designers of computer chips primarily used a single tactic to increase chip performance. They shrank the materials, packing more ‘punch’ into each piece of technology.

Eventually, just over 10 years ago, chip engineers came up with a new idea. Rather than designing a single large microprocessor so that it could accommodate many tiny transistors, they opted to create one from smaller chips that would be bound together and that would operate more efficiently.

Hence, the development of chiplets. Because chiplets are comparatively cheap to create and functioned better than existing options, the chiplet concept quickly gained widespread popularity. Companies like Apple, Amazon, Tesla, IBM and Intel introduced the technology into their systems.

Why it matters

The chiplet concept, based on advanced packaging technology, has driven industry progress around semiconductors, artificial intelligence, self-driving cars and military hardware.

The bundling of chips in this way is now essential for powering systems, processes and products around the world.

For the U.S., the trouble is that chip manufacturing and chip packaging, is largely dominated by conglomerates in Asia. At present, the majority of chip packaging occurs in Taiwan, Malaysia, South Korea and China.

This reality now means that chiplets are now a topic connected to U.S. policy making.

Chiplet policy explained

The new technology is frequently used for extreme technology performance purposes. For example, Intel recently developed a processor known as Ponte Vecchio that relies on 47 chiplets. It will be used in a supercomputer housed in Argonne National Laboratory, located near Chicago.

Intel has also developed new chip packaging prototypes, per a new Pentagon program. However, in the United States, there are no major manufacturers for the needed substrates. In March, President Joe Biden announced that American and Canadian companies need to be in the aforementioned fields for national security reasons. A $50 million Defense Production Act was subsequently launched.

Right now, “You don’t have suppliers. You don’t have a workforce. You don’t have equipment. You have to start from scratch,” says Adreas Olofsson, former manager of a U.S. Defense Department research initiative and current founder of a chip packaging startup.

The rest of the story…

In October of 2022, plans for an impressive semiconductor factory owned by a major state-backed company in China fell through. This followed the Biden administration’s escalation of the trade war over technology. The U.S. moved to restrict Chinese access to the Western tools and workers required to build the most sophisticated of semiconductors.

Several U.S. equipment suppliers almost instantly stopped their shipments and services to China and both Europe and Japan are expected to follow suit. Recent legal developments in the U.S. mean that American enterprises and citizens can no longer engage in any overseas chip building initiatives that fall into certain parameters. The threat of supply chain vulnerabilities introduced by foreign groups is a very real concern.

For more insights into supply chain vulnerabilities, please see CyberTalk.org’s past coverage. Lastly, to receive cutting-edge cyber security news, insights, best practices and analyses in your inbox each week, sign up for the CyberTalk.org newsletter.