Hashfast's chip might do 500Ghash on "a single chip" but so far that chip uses just as much power per Ghash as KNC's Jupiters so it hardly matters that it's on one chip. Their "one chip" is really four dies anyway and given the current power draw the cooling is going to be a nightmare. It is priced better per Ghash but it's also being delivered way later.
KnC's chip also contains multiple dies. What is your point?
A chip consists of one or more dies on a substrate. This has been explained, often with illustrations, on HashFast's, Cointerra's, and KnC's threads several times.
Density matters to many people. Space in data centers is very expensive and customers are charged by the rack.
Being able to fit the same hash power into 1/3 the volume is a huge savings on colocation costs and a godsend for anyone with space constraints.
Cooling isn't "going to be a nightmare." HashFast is using liquid cooling and their chip already runs underclocked at 500GH+.
VBS already tried spreading 'cooling nightmare' FUD months ago. For some reason, he doesn't post much these days.
Best,
-HF_CL