Chiplet Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Chiplet Market Size

Chiplet Market Trends & Drivers

Growing Consumer Electronics Industry Is Biggest Driver for Market

• The increasing disposable income of people has resulted in an increase in their spending on technically advanced consumer electronics devices, which, in turn, propels the advance of the market.
• In 2021, over half of the European people spent much more time on their electronic devices than last year. Likewise, in Spain, the share was 70%.
• Wearable devices, such as fitness bands and smartwatches, have gained popularity, as they are used to track health and fitness. These devices track physiological activity and human momentum using different sensors, such as GPS, skin capacitance sensors, and accelerometers.
• Devices that can monitor heart rate, count the calories gained and burned, and measure other biometric information in order to provide feedback on users’ physical activity require this semiconductor architecture.
• According to a research paper, one in three U.S. consumers owns a wearable technology device.
• Several advanced features in these consumer electronic devices, such as compact size, wireless connectivity, 3D visualization, and circuit miniaturization, are driving the demand for these chiplets. Moreover, microprocessor chiplets are commonly used in various electronic devices, such as laptops, tablets, smartphones, gaming consoles, DVD players, televisions, and dishwashers.

Growing Role of Chiplets in Healthcare Industry Is Key Opportunity

• Chiplet-based architectures provide numerous benefits for smart implants.
• Medical implants can present tough performance challenges, such as low leakage currents and high voltages (up to 20V), which might necessitate a specific process node that is different from digital node sizes.
• Medical implants can pose micromechanical assembly challenges, which can be solved by the different form factors chiplets allow.
• A separate functionality for different chiplets minimizes the impact of regulatory changes, since only the affected chiplets need to be redesigned and verified.
• All these factors ultimately mean a lower cost to develop the implant, as well as a shorter time to market.

Chiplet Industry Outlook

Processor Analysis

• The central processing unit category is dominating the market with a share of 40%. This is because the chiplet technology emerged in the design of CPUs, particularly for high-performance computing.
• CPU manufacturers can create a modular design, where each chiplet is responsible for a specific function, such as CPU cores, cache, I/O controllers, and accelerators. This modularity allows for more-flexible and scalable CPU designs, which will further enhance overall CPU performance, efficiency, and adaptability, catering to diverse applications from consumer electronics to data centers.
• Different chiplets can be designed for specific tasks. For example, high-performance CPU cores on one chiplet, a memory controller on another, and specialized accelerators on additional ones can be created. This specialization can lead to better a performance in specific workloads.
• In high-performance computing, chiplet-based designs are becoming increasingly common. CPU manufacturers use chiplets to integrate CPUs with high-bandwidth memory and accelerators, creating more-powerful and specialized processors for data centers and supercomputers.
• In January 2023, Intel launched its chiplet-based processors, Sapphire Rapids and Ponte Vecchio GPU. The 4th-generation Xeon CPUs, built on the Intel 7 process technology, are used by data center operators and board & server makers, as well as supercomputer operators.
• The GPU category is witnessing significant growth mainly due to the rising investment in the gaming sector and high-volume production media content. Moreover, the rising demand for advanced technologies, such as AR, VR, and AI, is fueling the category’s progress as they require high-speed analysis, for which GPU is considered an ideal option.
• GPU chiplets are a good choice for high-performance graphics processing workloads because they provide greater graphics rendering capabilities, parallel processing, and optimized power consumption.
• These devices offer scalability. By connecting multiple together, it is possible to build GPUs with varying levels of performance, memory capacity, and specialized processing capabilities for specific use cases.
• The artificial intelligence application-specific integrated circuit (AI ASIC) coprocessor category is projected to grow at the highest CAGR, of around 87.5%, during the forecast period. This is mainly due to the rising demand for specialized hardware accelerators in AI applications, as ASICs are now increasingly being developed for AI and associated technologies.
• Google's proprietary TPUs and Tensor Processing Units are a series of ASICs optimized to run open-source ML software.
• ASIC coprocessors are becoming increasingly necessary as AI workloads expand in the healthcare, finance, and automotive industries. AI-related tasks can be effectively and selectively offloaded from general-purpose processors, such as CPUs and GPUs, on to chiplet-based AI ASICs.
• These devices are engineered to perform exceptionally well in AI inference and training tasks, while consuming less power. They can be easily integrated into different hardware configurations due to their modular design, which makes them versatile for a wide range of AI applications.
• As AI becomes imperative for various industries and the demand for quicker, more-energy-efficient AI processing spikes, this category will continue to grow.

Based on processor, the market has the following categories:

• GPU
• CPU (Largest Category)
• APU
• AI ASIC Coprocessor (Fastest-Growing Category)
• FPGA

Packaging Technology Analysis

• The 2.5D/3D category holds the largest share in 2024. The benefit of integrating GPU, CPU, and memory, along with a decoupling capacitor, is offered by 2.5D/3D IC packaging solutions.
• 2.5D and 3D IC packaging play are becoming increasingly important in applications such as CPU, mobile AP, Si photonics, display driver ICs, and automobiles.
• 2.5D/3D packaging techniques enable the enclosure of multiple ICs in a single package. To achieve a high die-to-die interconnect density, two or more active semiconductor chips are arranged side by side on a silicon interposer in a 2.5D structure.
• Die stacking is used in 3D structures to integrate active chips for the shortest interconnect and smallest package footprint. Miniaturization, high performance, and bandwidth are offered by these packaging options.
• The flip chip chip scale package (FCCSP) also holds a significant market share in the market, as they are widely used in smartphones, laptops, and portable gaming devices.
• These packages are used for applications in which both performance and form factor are critical, such as high-performance mobile devices (including 5G), infotainment and ADAS for automotive, and AI. Moreover, low inductance and higher routing density allow for better electrical paths for high-frequency signals, which is why FCCSP is suitable for baseband, radio frequency, and in-substrate antenna applications.

The report offers insights into the following packaging technologies:

• System-in-Package (SiP) (Fastest- Growing Category)
• FCCSP
• FCBGA
• 2.5D/3D (Largest Category)
• WLCSP
• FO

End Use Analysis

• The Enterprise electronics category is dominating the market with 25% revenue in 2024.
• Chiplets are used in various enterprise electronic applications, such as data center servers, AI accelerators, HPC systems, network equipment, and storage systems. The high-paced growth of e-commerce, increase in the usage of social media, and greater preference for over-the-top (OTT) platforms drive the market in this category.
• The growth of e-commerce and social media relies heavily on data storage and processing capabilities, often facilitated by cloud computing and data centers.
• To enable high-performance computing, effective data processing, and increased power economy, chiplets are widely used in the data centers integral to these applications.
• Due to their scalable and modular design, they are easy to integrate into the networking hardware, storage systems, and servers in data centers, thereby increasing the scalability and performance of the infrastructure.

The shares and growth forecasts for the following end uses have been provided in the report:

• Enterprise Electronics (Largest Category)
• Consumer Electronics (Fastest Growing Category)
• Industrial Automation
• Healthcare
• Military & Aerospace
• IT & Telecommunications
• Others

Asia-Pacific Market Holds Largest Share

• Geographically, APAC holds the largest share, of 45%, in 2024, and it is projected to grow at the highest CAGR, of 87.1%, during the forecast period. This is mainly due to the booming electronics sector, as well as the increasing disposable income of consumers. Thus, the increasing sale of consumer electronic devices, along with the burgeoning adoption of the IoT technology, is expected to drive the market growth.
• The usage of chiplets is rising in signal processing, networking equipment for data processing packet switching, and signal processing as China continues to invest in 5G networks and high-speed telecommunications. In edge devices that need high-performance computing at the edge of the network, chiplets are essential.
• Moreover, Asia-Pacific is home to many of the world’s leading consumer electronics manufacturers, and chiplets are commonly used in smartphones, tablets, and laptops. The demand for smaller, efficient, and high-performance components in these products is satisfied by chiplets.
• China is a leading investor in the semiconductor industry, where chiplets are employed in many phases of the manufacturing process, from fabrication to testing and packaging.
• In 2022, China planned a USD 143-billion investment package for the semiconductor sector
• North America also holds a significant market share, due to the presence of major market players, such as Intel Corporation, and Nvidia Corporation. These market players are focusing on product launches and strategic initiatives. Moreover, the region is a hub for technological advancements, which not only drives the demand for chiplets but also depends on them in modern times.
• In November 2023, Mercury Systems Inc. announced an agreement with the U.S. Navy to develop manufacturing capabilities that will enable commercial photonics chiplets to accelerate edge processing in defense applications.

Further, regions and countries analyzed for this report include:

• North America
  • U.S. (Larger and Faster-growing Country Market)
  • Canada
• Europe
  • Germany (Largest Country Market)
  • U.K. (Fastest-Growing Country Market)
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (APAC) (Largest and Fastest Regional Market)
  • China (Largest Country Market)
  • Japan
  • India
  • South Korea (Fastest-Growing Country Market)
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest Country Market)
  • Mexico (Fastest-Growing Country Market)
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest Country Market)
  • South Africa
  • U.A.E. (Fastest-Growing Country Market)
  • Rest of MEA

Chiplet Market Share

The chiplet market is fragmented in nature due to the presence of several market players, ranging from large companies to medium-sized companies, which contribute the majority of the market revenue. These market players are adopting various strategies, such as product launch, mergers and acquisitions to gain a competitive edge.

Chiplet Industry News

• In September 2023, Intel Corporation announced plans to launch Meteor Lake on December 14. Meteor Lake chips are the company’s first CPU with different chiplets for each component.
• In June 2023, Marvell’s introduced high-speed silicon interconnects made on the new 3-nm process by Taiwan Semiconductor Manufacturing Co. (TSMC), which stitch together chiplets that cut power consumption in data centers. The new building blocks are part of Marvell’s strategy to develop IP for chip designs that increase bandwidth, performance, and energy efficiency in data centers and upcoming autonomous vehicles.
• In June 2023, AMD released the Versal Premium VP1902 adaptive system-on-chip (SoC). With twice the capacity of its predecessor, this chiplet-based device enables designers to streamline the verification of complex semiconductor designs and accelerate the release of next-generation technologies to the market.