Chiplets: How US Technology is Helping China Challenge US Dominance

In 2021, a Silicon Valley startup called zGlue sold its patents for chiplet technology to a Chinese company called Chipuller.
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In recent years, the global semiconductor industry has witnessed a surge in the development and adoption of chiplet technology, a groundbreaking approach that allows for more efficient and cost-effective packaging of small semiconductors to create powerful and versatile computing systems. This technology, initially propelled by a struggling Silicon Valley startup, zGlue, has taken an unexpected turn as the patents for chiplets were sold to China in 2021. This event has raised questions about the role of the Committee on Foreign Investment in the United States (CFIUS) and the potential implications for the global semiconductor landscape.

In 2021, a Silicon Valley startup called zGlue sold its patents for chiplet technology to a Chinese company called Chipuller.

Chiplet technology is a way to package groups of small semiconductors to form one powerful brain capable of powering everything from data centres to gadgets at home. It is seen as a key to China’s efforts to achieve self-reliance in semiconductor manufacturing.

The Evolution of Chiplet Technology

Chiplets are small computer chips that can be as tiny as a grain of sand or larger than a thumbnail. They are assembled together through advanced packaging techniques, creating a cohesive and high-performing system capable of powering a wide range of applications, from data centers to consumer electronics. Chiplet technology has gained momentum as traditional chip manufacturing faces challenges in scaling down to smaller transistor sizes, prompting the industry to explore alternative solutions.

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The Significance for China

China’s interest in chiplet technology stems from its drive to achieve self-reliance in semiconductor manufacturing. Faced with restrictions on accessing advanced machines and materials for cutting-edge chip production, China has turned its focus towards chiplet technology as a strategic solution. This approach allows China to circumvent some of the limitations imposed by external factors and potentially catch up with global leaders in semiconductor innovation.

Chipuller: China’s Strategic Move

The acquisition of zGlue’s chiplet patents by Chinese startup Chipuller in 2021 marked a significant turning point. This acquisition was facilitated through a two-step transfer process, raising questions about the oversight and role of CFIUS in such transactions. While the patent sale itself might not have fallen under CFIUS’s jurisdiction, the incident highlighted potential gaps in the regulatory framework, prompting discussions about the need for reform.

Concerns in USA

The sale of zGlue’s patents to Chipuller has raised concerns in the US about the transfer of sensitive technology to China. The Committee on Foreign Investment in the United States (CFIUS), which is responsible for reviewing foreign investments that could pose a national security risk, did not block the sale.

Industry experts say that chiplet technology has become even more important to China since the US barred it from accessing advanced machines and materials needed to make today’s most cutting edge chips. China is now heavily reliant on chiplet technology to build its own chips.

In an interview, Chipuller chairman Yang Meng said that “US-China competition is on the same starting line” when it comes to chiplet technology. He added that “in other (chip technologies) there is a sizeable gap between China and the United States, Japan, South Korea, Taiwan.”

Major setback

The development of chiplet technology in China is a major setback for the US in the global semiconductor war. The US has long been the dominant player in the semiconductor industry, but China is now rapidly catching up. The sale of zGlue’s patents to Chipuller is a sign that China is not afraid to use technology transfer to achieve its goals.

The US government is likely to take steps to counter China’s chiplet technology development. It could tighten export controls on chiplet technology or impose sanctions on Chinese companies that use it. The US could also try to develop its own chiplet technology that is superior to China’s.

China’s Push for Chiplet Innovation

Chinese entities, from tech giants like Huawei to military institutions, have rapidly embraced chiplet technology for a diverse range of applications, including artificial intelligence and self-driving cars. This technology has enabled China to progress despite limitations in accessing cutting-edge chip manufacturing technologies. With over 900 chiplet-related patent applications and grants filed by Huawei in China, the nation is positioning itself as a major player in chiplet innovation.

The Future of Chiplet Technology

As chiplet technology continues to gain prominence, China’s investments in chip packaging equipment have surged, reflecting a growing commitment to this innovative approach. The Chinese semiconductor industry’s emphasis on chiplets aligns with broader national strategies to advance key and cutting-edge technologies. Chiplet technology has the potential to reshape the semiconductor landscape, providing a pathway for China to enhance its semiconductor capabilities and achieve greater self-sufficiency.


The sale of chiplet patents from a struggling Silicon Valley startup to China has brought chiplet technology to the forefront of the global semiconductor industry. China’s strategic embrace of chiplet technology offers a viable solution to its semiconductor ambitions, allowing it to navigate challenges posed by international restrictions. As chiplet innovation accelerates in China, it could serve as a catalyst for the nation’s self-reliance in semiconductor manufacturing, reshaping the dynamics of global technological competition. The incident also underscores the need for regulatory reform and greater oversight in technology transfer, especially in areas with national security implications.

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