In my mind advanced packaging competes more directly with making circuit boards that have more chips on them than it does with making chips that have more elements on them either by making the chips bigger or the elements smaller.
I fail to see the competition. It's not just integration. Projects like AMD's Ryzen would simply not be possible without advanced multi-chip packaging.
On one hand chiplets win because you can fit it in a laptop form factor and it probably costs less than the dual socket motherboard and two CPUs. There is also the psychology that you feel like a Master Knerd if you have a two socket machine.
I don't think Ryzen really takes advantage of it but you can have a really high performance interconnect inside the package. Even there you have a competition between in-package integration and the alternatives. For instance HBM-based GFX cards exist on the market side-by-side with GFX cards that have external GDDR memory.
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