It is just the latest component to be bolted on to the CPU die, but it has been mooted for years. In fact, Hot Hardware remembers that it was first being talked about in 2005 when James Blunt was causing the world to suffer with his "You're Beautiful" single.
At the Intel Developer Forum, Intel showed the assorted throngs a Pentium M 738 with a CMOS voltage regulator on-package. It claimed that this allowed the company to save large amounts of power by shifting to low power states much more quickly. At the time the technology was half-baked and now apparently Chipzilla has got it working.
The Haswell VRM on-die allows for multiple voltage rails and controls voltage for the CPU, on-die GPU and a system I/O, integrated memory controller.
It has dubbed all this a FIVR (Fully Integrated Voltage Regulator) as in "lend us a FIVR until payday". It is supposed to kill off all voltage ripple and be significantly more efficient than a traditional motherboard VRM. It is a 50th the size for a start.
Hot Hardware thinks that this means Haswell will draw less power than Ivy Bridge. It'll enter and exit power-saving states more quickly, which allows for more aggressive throttling, and it should run extend system battery life.
However, FIVR will hurt CPU temps and stop overclocking at higher clock speeds. According to leaked spec sheets, the upcoming HD 4770K series holds the line on base and turbo clock speeds compared to the 3770K, but increases TDP to 84W, up from 77W.
This does not mean the system's power consumption has changed, but a component that used to exist in a separate domain is now being cooled by the CPU heatsink+fan and sits within the same socket.
So it could be that Intel might need to stuff up CPU overclocking performance. FIVR could become a little hot if it is processing too much and this will limit overclocking. It is a step in the right direction for notebooks, tablets, and smartphones where the load is lighter and power consumption is more important.
While Intel is using Haswell to debut the technology it is not clear if Chipzilla wants it under the bonnet of Silvermont yet. But if it does work then Intel will use it as a the icebreaker to get it into traditionally closed to x86 due to high power consumption.