The term system-on-chipⁱ describes exactly what is says, an entire system on a single chip. Traditionally, computer systems are designed with different chips for different parts of the system. For instance, mainstream desktop computers typically contain at least one chip for the processor, one chip for the north bridge (for controlling the system memory) and one chip for the south bridge (for performing device I/O).

System-on-chip designs replace the multiple chips with a single chip which implements all of the functionality in the system. The advantage is tighter integration and cost reduction. The disadvantage is that the system design usually contains reduced functionality over the multiple chip designs due to size constraints when working with a single chip.