When a product has to be made small, the board real estate is limited or it has to be manufactured in large numbers.... SoC is the Answer. A Microprocessor evolved into a Microcontroller by packing many external chips into one chip. Now uC Card along with the other blocks like A-D, Port Drivers, Networking elements, Display Driver and other peripherals can be packed into one chip.
Some Power Supply and RF blocks cannot be easily added inside as they have a silicon processing more specific to their applications. Laser trimmed Instrumentation Op-Amps, high accuracy resistor arrays, high value capacitors, magnetics and supporting chips are placed outside on the PCB.
The SOC can pack Digital Chips, Memory, A/D, D/A converters, uC, RAM and Custom programmable areas. For more specialized communications, analog and power requirements; Special SoC types can tackle RF and Power management within a chip because of proprietary silicon processing expertise.
System on a chip - Wiki
"A system on a chip or system on chip (SoC or SOC) is an integrated circuit (IC) that integrates all components of a computer or other electronic system into a single chip. It may contain digital, analog, mixed-signal, and often radio-frequency functions—all on a single chip substrate. A typical application is in the area of embedded systems."
Programmable SoC offers an alternative to custom ASIC as you can make different products from the same chip, yet make products that are portable and low power. The software, pcb, user interface and support components has to be redesigned for every unique product. Many standard IPs are available for Design and Reuse.
Some of the early nxp 8031 variations had integrated a lot of outer chips like A/D, D/A display driver etc. This made Programmable Industrial Instruments/Gadgets possible with just a few external components. Now many variations are available from chip manufacturers, with more speed, memory and peripherals inside. Futuristic gadgets may be intelligent, interactive, networked and portable. The SoC chip makes it all possible, by integrating all product functions within it except the user interface.
SoC with a Color LCD driver, Wi-Fi, USB, RAM and Flash capabilities....at last you have a Computer in a Chip. Better still Web-Chip.
With 40 nm Stratix IV FPGAs you can reach new levels of system-on-a-chip (SoC) integration. Building on the advanced, proven Stratix III architecture, Stratix IV FPGAs deliver a high-density, feature-rich and high-performance core fabric. Combined with flexible I/Os, high-bandwidth transceivers, and memory interfaces,
Intrinsix - IP-ASIC-SoC Solutions
Typically, SoCs will incorporate processors, which allows customization in the layers of software as well as in the hardware around the processors. However, as the number of transistors in a chip grows by a factor, the design complexity grows by an exponential of that same factor!