The creation of chiplets presents a novel challenge for the packaging segment of the semiconductor field. This sector is responsible for the assembly of chip components and performance testing of the completed device. To facilitate effective collaboration between multiple chiplets, more intricate packaging methods are needed compared to those used for single-piece chip production. This novel methodology named “advanced packaging” is less daunting for China to handle. Chinese corporations already shoulder 38% of the entire global chip packaging operations. While businesses in Taiwan and Singapore possess more sophisticated technologies, catching up in this area is less challenging.
“Packaging does not have a specific standard, has decreased automation and depends significantly on capable technicians,” expounds Harish Krishnaswamy, a scholar at Columbia University who is an authority on telecommunications and chip design. Due to the cheaper labor cost in China compared with the west, “I don’t see it taking decades [for China to compete],” he articulates.
Investments are being made in the chiplet industry. Anyone familiar with the semiconductor industry knows developing chiplets requires finance. Driven by a needed sense of urgency to evolve the domestic chip sector swiftly, the Chinese government and other investors have started funding chiplet engineers and startups.
The National Nature Science Foundation of China, a prominent national funder for core research, unveiled its strategy to finance 17 to 30 chiplet research endeavors encompassing design, manufacturing, and packaging, among others, in July 2023. They plan on disbursing $4 million to $6.5 million for research over the next four years. The aspiration is to enhance chip performance by “one to two magnitudes.”
Despite the fund’s focus being more academic research-oriented, some regional governments are also willing to invest in the industrial prospects of chiplets. Wuxi, a mid-sized city in East China, is striving to be the nerve center of chiplet production and is being called a “Chiplet Valley.” Officials in Wuxi proposed to establish a $14 million fund last year to attract chiplet corporations to the city, which has already successfully drawn in several local companies.
Meanwhile, numerous Chinese startups, all vying to enter the chiplet market, have secured venture capital. Polar Bear Tech, a company developing broad and specialized chiplets, garnered over $14 million in financial backing in 2023. By February 2023, they had launched their initial chiplet-based AI chip, the “Qiming 930.” Other newcomers in the market, such as Chiplego, Calculet, and Kiwimoore, have also gained millions in capital to create specific chiplets for vehicles and multimodal artificial-intelligence models.
